Finance - Matching Match each topic with the correct description. \( \begin{array}{ll}\text { Compound Interest } & \text { a. MANY deposits } \\ \text { Payout Annuity } & \text { b. ONE deposit } \\ \text { Annuity } & \text { c. MANY payments } \\ \text { Loans } & \text { d. MANY withdrawals }\end{array} \)
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Compound interest, often referred to as the magic of finance, is like watching your money grow exponentially! It applies to a single deposit (b), where interest earns on both the initial principal and the accumulated interest from previous periods, leading to a snowball effect over time. Payout annuities are fantastic for those who appreciate a steady income stream! In this scenario, you have many payments (c) made to you, typically as a result of a lump sum invested upfront. It’s a cherished choice for retirees who wish to transform their savings into ongoing cash flow.