The Longer Money Can Earn Interest

question 46

Multiple Choice

The longer money can earn interest,

• A) the greater the interest earned on the original deposit exceeds the interest-on-interest.
• B) the greater the compounding effect.
• C) the greater the present value must be to reach a financial goal.
• D) the greater the risk to the investor of not reaching a financial goal.

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Definitions:

Developed Countries

Nations with highly advanced economies, characterized by high per capita income, strong infrastructure, and widespread industrial activity.

Remittances

Money sent by migrants to their home country, often to family members, contributing to the receiving country's economy.

Illegal Immigrants

Individuals who enter or reside in a country without the permission or legal authorization from that country's government.

Recession

A period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.