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You invest a certain amount of money today. The process of determining how much money that investment will produce in the future is called​ ________. A. present value B. compounding C. annuitizing the
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You invest a certain amount of money today. The process of determining how much money that investment will produce in the future is called​ ________. A. present value B. compounding C. annuitizing the cash flow D. discounting

User Paul Weiland
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Answer:

Correct option is B,compounding

Step-by-step explanation:

Compounding could be likened to making a situation complex,when applied to investment it means the process of determining the worth of investment considering the initial invested amount and the accumulated interest in the future.

In order to compound, the future value formula comes handy and it is given below:

FV=PV*(1+r)^N

Where the PV is the amount invested today, r is the rate of return and the N is the duration of investment

User Zun
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