What concept describes how quickly an investment increases in value when interest is paid not only on the original amount invested, but also on the accumulated interest payments?
A) present value
B) future value
C) compound interest
D) real rate of interest

Question

Quizplus · Accepted Answer

Compound interest is the concept that describes how quickly an investment increases in value when interest is paid not only on the original amount invested but also on the accumulated interest payments. Present value refers to the current value of a future sum of money, while future value is the value that an investment will grow to after a certain period of time. The real rate of interest adjusts for inflation and measures the true return on an investment.

What Concept Describes How Quickly an Investment Increases in Value