Answers 2027 Ignite Financial Literacy-Personal Finance - EL3403 Investing and Financial Markets — Unit testQuestion 5

5

QuizMultiple Choice

Investing and Financial Markets — Unit test

Question 5 of 15 • 2027 Ignite Financial Literacy-Personal Finance - EL3403

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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