Ask a New Question
Menu

The future value of a deposit in a savings account will be larger

a. the lower the interest rate is.
b. the smaller the risk is.
c. the longer a person waits to withdraw the funds.
d. the smaller the initial deposit is

1 answer

The correct answer is:

c. the longer a person waits to withdraw the funds.

The future value of a deposit increases with time due to the effects of interest compounding. The longer the money is left in the account, the more interest it earns.