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Which of the following statements is correct? Group of answer choices The principal is the amount of interest earned each period. Discounting is the process
Which of the following statements is correct?
Group of answer choices
The principal is the amount of interest earned each period.
Discounting is the process by which interest earned on an investment is reinvested so that in future periods, there is interest on interest as well as the original principal.
Compound interest consists of both simple interest and interest on interest.
The future value is simply the current value of a future cash flow that has been discounted at the relevant discount rate.
All the answers are correct.
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