After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest.

True

False

The given statement " After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest " is TRUE.

Explanation:

The basic interest-earning process allows no depositor or lender to gain more interest in any value that is previously earned.

All other factors remain stable at the end of the second year, a potential cumulative interest-based value equals an existing, simple interest based value.

The future value (FV) of the current-value investment dollars earning interest at an annual rate of r-composite m times per year for a span of t years shall be: FV = PV (1+r / m) mt or FV = PV (1+i) n