10
QuizMultiple Choice

Investing and Financial Markets — Unit test

Question 10 of 11 • 26-27 Ignite Economics-KY-Economics

Why is compound interest preferable to simple interest when investing?

Answer
A
Compound interest pays at least double the interest on the principal during each month.
B
Compound interest is paid by the week or by the month, not only once during a year.
C
Compound interest is based on the entire principal, not just a percentage of the principal.
D
Compound interest pays interest both on the principal and the interest earned in each period.
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