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:

Joint Tenants

Co-owners of property who have equal rights to the whole property and a right of survivorship, meaning if one owner dies, the remaining owner(s) inherit the deceased's share directly.

Right Of Survivorship

A feature of some types of co-ownership of property causing a co-owner’s interest in property to be transferred on his death immediately and by operation of law to his surviving co-owner(s). See also tenancy by the entirety and joint tenancy.

Tenancy In Common

A form of co-ownership of property that is freely disposable both during life and at death, and in which the co-owners have undivided interests in the property and equal rights to possess the property.

Right Of Survivorship

A legal principle in property law where, upon the death of one owner, the ownership interest of the deceased automatically transfers to the surviving owner(s) without the need for probate.