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1.
Which of the following is used in the formula for determining compounded interest?
All of the above. Principal, rate of return, and time periods are used in the compounding formula.
2.
Interest paid on savings accounts and bonds is generally taxable.
True. Interest paid on savings accounts and bonds is generally taxable.
3.
By investing often while you earn compound interest, you can increase your total return. This is possible because frequent investing increases your _______.
Principal. Frequent investing adds to the size of your principal, thus magnifying your return.
4.
The amount of money you invest is called _______.
Principal. The invested amount of money is called principal.
5.
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.