Al other things being equal, the fumerical differefice between a present and a future value corresponds to the amount of interest eamed during the

deposit of investment period. Each Ine on the folowing graph corresponds to an interest rate: $0\%,11\%,$ or $21\%.$ Identify the interest rate that

corresponds with each line.

Line A:

Line $B$ :

Life $C$ :

Imrestmerks and loans base their interest calculations on one of two possible mathods: the

interest and the

$\_$ imtereat methods. Boch methods apply three variables$-$the amoumt of principal, the interest rate, and the imeatment or deposi.

period$-$to the amount deposited or ifvestsed in order to compute the amount of imterest. However, the two methods differ in their relationship

between the variables.

Assume that the variables $1,N,$ and $P_N$ represerk the interest fate, ifvestment or deposik period, and present value of the amount depasited or

invested, fespectively. Which equation best represemts the calculation of a future value FV :) using:

Compound inkerest?

$PV=W(1+I{)}^N$

$PV=W+($:$PPIN)$

$PV=\frac{W}{(1+{)}^K}$

Simple inkereat?

Identify whether the following statemenks about the simple and compound interest methods are