Why Should You Care About the Power of Compounding and the Time

question 57

Multiple Choice

Why should you care about the power of compounding and the time value of money?

• A) It is critical to obtaining your future financial goals.
• B) The sooner you start saving for retirement, the less you have to save each year.
• C) You may outlive your Social Security and employer's retirement plan.
• D) It is possible to build a large estate for yourself, spouse, and children.
• E) all of the above

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Definitions:

Withdrawals

Funds drawn from the enterprise by its proprietors for their personal needs.

Revenues

Revenues are the total income generated by a company from its business activities, such as sales of goods or services, before any expenses are deducted.

Expenses

The costs incurred in the process of earning revenue, including operating costs, taxes, interest, and cost of goods sold.

Cash Investments

Funds placed into financial instruments or assets with the expectation of preserving capital and generating a return.