Compound interest results in a higher future value than simple interest because of:
A) the timing of cash flows.
B) interest on accumulated interest.
C) compounding more than once in a year.

Question

Quizplus · Accepted Answer

Compound interest results in a higher future value than simple interest primarily because it allows for interest to be earned on previously accumulated interest, effectively causing the investment to grow at an accelerating rate over time.

Compound Interest Results in a Higher Future Value Than Simple