When a value or a cash flow is compounded or discounted,the value or cash flow will have
A) linear growth.
B) exponential growth.
C) constant growth.
D) percentage growth.

Question

Quizplus · Accepted Answer

Compounding and discounting involve the application of exponential growth or decay formulas, rather than linear or constant growth. Therefore, choice B is the best answer. Choice D is partially correct, as percentage growth is involved, but it does not fully capture the nature of compounding and discounting.

When a Value or a Cash Flow Is Compounded or Discounted,the