Help
Course Catalog > Stocks > 100
Stocks 102: Make Compound Interest Work for You

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Interest paid on savings accounts and bonds is generally taxable.
Choose wisely. There is only one correct answer.
True. Interest paid on savings accounts and bonds is generally taxable.
2.
Reinvesting your dividends helps you compound your earnings because it _______.
Choose wisely. There is only one correct answer.
Builds your investment base. The larger your investment base, the more there is to compound.
3.
The amount of money you invest is called _______.
Choose wisely. There is only one correct answer.
Principal. The invested amount of money is called principal.
4.
Which of the following is used in the formula for determining compounded interest?
Choose wisely. There is only one correct answer.
All of the above. Principal, rate of return, and time periods are used in the compounding formula.
5.
A tax-sheltered account always protects your investment interest from taxes, even when you withdraw from it.
Choose wisely. There is only one correct answer.
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 A tax-sheltered account lets interest grow within your account without taxes until it is withdrawn. Once it is withdrawn, it may be taxed.