select the correct answer from each drop - down menu. kevin has deposited money into a savings account…

select the correct answer from each drop - down menu. kevin has deposited money into a savings account. choose the correct terms to complete each sentence. kevin deposits $100 into a savings account today. this is his. in one years time, kevins money is worth $105. this is his. in one year, kevins money earns 5 percent. the $5 he earns is. the interest kevin earns in the first year will also earn interest in subsequent years. this is called

select the correct answer from each drop - down menu. kevin has deposited money into a savings account. choose the correct terms to complete each sentence. kevin deposits $100 into a savings account today. this is his. in one years time, kevins money is worth $105. this is his. in one year, kevins money earns 5 percent. the $5 he earns is. the interest kevin earns in the first year will also earn interest in subsequent years. this is called

Answer

Brief Explanations:

The initial deposit of $100 is the present - value. After one year, with a 5% interest rate, it grows to $105 which is the future - value. The $5 is the interest amount. The fact that the money will earn interest in subsequent years shows the concept of compounding (assuming the interest is compounded).

Answer:

  1. Present - value: The $100 Kevin deposits today is the present - value.
  2. Future - value: The $105 that Kevin's money is worth in one year is the future - value.
  3. Interest amount: The $5 that Kevin earns in the first year is the interest amount.
  4. Compounding: The fact that the first - year interest will also earn interest in subsequent years is called compounding.