What is one major advantage of long-term savings strategies?A.They generally have the lowest available interest rates.B.They allow savings to grow significantly over time.C.They make more money available for nonessential purchases.D.They make it easier to pay for monthly expenses.
Question
What is one major advantage of long-term savings strategies?A.They generally have the lowest available interest rates.B.They allow savings to grow significantly over time.C.They make more money available for nonessential purchases.D.They make it easier to pay for monthly expenses.
Solution
One major advantage of long-term savings strategies is B. They allow savings to grow significantly over time. This is because the longer you save, the more time your money has to accumulate interest. This is especially true if you're investing in something with a fixed interest rate. Over time, you'll not only earn interest on the money you initially invested, but you'll also earn interest on the interest you've already earned. This is known as compound interest and it can result in significant growth of your savings over the long term.
Similar Questions
A long-term savings strategy is most useful for people who want to:A.increase the value of their investments as much as possible.B.avoid putting their money into banks or credit unions.C.withdraw their savings to pay for unexpected expenses.D.create a household budget that uses all of their monthly income
One advantage of a long-term loan compared to a short-term loan is that a long-term loan:A.allows a person to borrow more money at a lower interest rate.B.does not require the borrower to have a good credit score.C.does not force the borrower to make payments every month.D.can be paid off in full without the borrower paying any interest.
One example of a short-term savings strategy is:A.an employer-sponsored 401(k) plan.B.a high-risk stock market investment.C.a free checking account.D.a low-interest bank account.
What is one advantage of whole life insurance policies over term life insurance policies?A.Whole life insurance is available to young people.B.Whole life policyholders do not have to pay premiums.C.Whole life insurance is less expensive.D.Whole life policyholders can borrow against the policy.SUBMITarrow_backPREVIOUS
Which option is the best example of a short-term savings goal?A.Paying for graduate schoolB.Buying a new carC.Buying a video game consoleD.Starting your own businessSUBMITarrow_backPREVIOUS
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.