The equation that calculates the future value of an investment with the interest rate and leaves all interest payments in the account until the final withdrawal is referred to as the ________ equation.

Question

Quizplus · Accepted Answer

The equation that leaves all interest payments in the account until the final withdrawal is referring to the compound interest equation. The simple interest equation only takes into account the initial investment and interest earned annually, while the present value equation calculates the current value of a future payment. The exponential interest equation is not a commonly used financial term.

The Equation That Calculates the Future Value of an Investment