What is the outcome if the number of payment periods increases in an investment scenario?

When the number of payment periods increases in an investment scenario, the future value of the investment increases. This is primarily due to the compounding effect. Compounding allows the investment to earn interest not only on the initial principal amount but also on the accumulated interest from previous periods.

As the payment periods extend, this compounding mechanism has more opportunities to occur. For example, if you are investing a set amount of money regularly over a longer timeframe, more interest will accumulate over time because each interest payment is added to the principal, leading to further interest calculations in subsequent periods. This results in a higher future value of the investment compared to a situation where the number of payment periods is fewer.

In contrast, the other options would not accurately reflect the principle of compounding interest and its effects over time. The investment does not decrease or stay the same; rather, it benefits from more opportunities to grow, emphasizing why an increased number of payment periods contributes to a greater future value.