Answer:
A. compounded value of the interest payments.
Explanation:
let's assume you take out a loan of $50,000 at an interest rate of 5% annually for 2 years, the future value of the loan :
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$50,000(1.05)^2 = $55,125
We can see that the future value of the loan was determined by (1 + r)^n which is the compounded value of interest payments
