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1.
A tax-sheltered account always protects your investment interest from taxes, even when you withdraw from it.
False. A tax-sheltered account lets interest grow within your account without taxes until it is withdrawn. Once it is withdrawn, it may be taxed.
2.
The amount of money you invest is called _______.
Principal. The invested amount of money is called principal.
3.
The Rule of 72 states that if you divide 72 by a given interest rate, you will learn how many years it will take for an investment to double. How long would it take for an investment with an interest rate of 4% to double?
18 years. Dividing 72 by 4 gives you 18.
4.
Reinvesting your dividends helps you compound your earnings because it _______.
Builds your investment base. The larger your investment base, the more there is to compound.
5.
Interest paid on savings accounts and bonds is generally taxable.
True. Interest paid on savings accounts and bonds is generally taxable.
