Which of the following is correct about a financial instrument and its future value, keeping all other things constant?

Question

Quizplus · Accepted Answer

The higher the interest rate on a financial instrument, the higher the future value because higher interest rates lead to greater growth in value over time. This is due to the compounding effect of interest, which means that interest earned on the principal amount also earns interest, resulting in a higher future value.

Which of the Following Is Correct About a Financial Instrument