7
QuizMultiple Choice

Study Guide and Quiz

Question 7 • GA-Introduction to Business and Technology

If you want to take advantage of compound interest, what should you do when an investment produces interest?

Answer
A
Use the interest to pay your bills.
B
Reinvest the interest.
C
Put the interest in a savings account.
D
Put the interest in a checking account.

Explanation

To benefit from compound interest, reinvest the interest so it can earn interest too. Over time, both your original investment and the accumulated interest can generate additional returns. Using the interest for bills or keeping it in an account that does not add it to the investment would reduce this compounding effect.

AI-written and checked against the verified answer.

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