Consider a graph of future values of two investments of $1000. How would you expect the graphs of the future values to look if both investment 1 earns 15% compounded annually, and investment 2 earns 10% compounded annually?
A) Investment 1 is steeper and the graph is growing at a faster rate.
B) Investment 2 is steeper and the graph is growing at a faster rate.
C) Investment 1 is steeper and the graph is growing at a slower rate.
D) Investment 2 is steeper and the graph is growing at a slower rate.
E) The two graphs look the same as they are both compounding interest.

Question

Quizplus · Accepted Answer

Investment 1, with a higher interest rate of 15% compounded annually, will grow faster than Investment 2, which has a 10% annual compound rate, making its graph steeper.

Consider a Graph of Future Values of Two Investments of $1000