Compounding Refers to

question 67

Multiple Choice

Compounding refers to

• A)the calculation of interest rates after the compounding effect of taxes has been allowed for.
• B)the paying back of both interest and principal during the life of a fixed payment loan.
• C)the process of earning interest on both the interest and the principal of an investment.
• D)the increased value of an investment that arises from the payment of periodic interest.

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Definitions:

Encoding

The beginning step of converting data into a format suitable for memory storage.

Remembering

The process of retrieving information or experiences from the past, involving various cognitive mechanisms and parts of the brain.

Decoding

The process of interpreting and making sense of a message or symbol system, such as reading or understanding spoken language.

Recall

The process of retrieving information from memory without the aid of cues.