Basics Beginner: Make Compound Interest Work for You

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1.
A tax-sheltered account always protects your investment interest from taxes, even when you withdraw from it.
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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 A tax-sheltered account lets interest grow within your account without taxes until it is withdrawn. Once it is withdrawn, it may be taxed.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.
Interest paid on savings accounts and bonds is generally taxable.
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True. Interest paid on savings accounts and bonds is generally taxable.
3.
The longer an investment is allowed to compound interest, the higher its return will be.
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True. Although time wont affect the actual rate of return, the return itself will grow, and it will grow much larger than it would from simple interest.
4.
To find out the rate of interest that you would need to double your investment in a certain number of years, _______.
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Divide 72 by the number of years. To find out the rate of interest you will need to double your investment in a certain amount of years, divide 72 by the number of years.
5.
The _______ you invest your money, the _______ compounding can work for you.
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Earlier / More. Compounding expands your money greatly over time.