How does the length of time affect the future value of an investment?

The correct answer highlights that the length of time has a significant impact on the future value of an investment due to the effect of compound interest. When investments are allowed to grow over a longer period, they can benefit from compounding, which means that not only does the initial principal earn interest but so do the accumulated interest amounts from previous periods. This compounding effect can lead to exponential growth of the investment over time.

As a result, the longer the investment is held, the more pronounced the effects of compound interest become, which leads to a larger future value. In practical terms, this illustrates the importance of time in making investment decisions—starting to invest early can yield substantially higher returns compared to waiting.

Other options misrepresent the relationship between time and investment value, suggesting either detrimental effects or a lack of influence on future value, which does not align with the fundamental principle of how compound interest works in finance. Understanding this concept is crucial for making informed financial decisions and maximizing investment growth.