tomsm's Investment account at his bank has compounding Interest. He Isn't sure if this is a positive thing for his investment. W

Question

3 years ago

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tomsm's Investment account at his bank has compounding Interest. He Isn't sure if this is a positive thing for his investment. W

hat is the BEST advice you can offer Tom? OA. Ask your bank to compound the interest less frequently. OB. Withdraw your investment immediately because compounding Interest is a scam. OC. Invest in a bank that doesn't offer compounding Interest so there is less risk. OD. Keep your account open and you will earn more on Interest you've already earned. Reset Next reserved.

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1 answer:

Margarita [4] · Answer 1 · 2022-08-30T20:39:53+03:00

Answer: Keep your account open and you will earn more on Interest you've already earned

Explanation:

Since Tom's investment account at his bank has a compounding interest, the best advice that'll be offered to Tom is to keep the account open and he will earn more on Interest than what he has already earned.

It should be noted that compound interest makes ones money grow faster. The reason for this is due to the fact that the interest is calculated based on the accumulated interest that the individual has earned over time and the original principal.

Therefore, it isn't advisable for Tom to withdraw his money or ask the bank to compound the interest less frequently but rather, he should keep the account open as he'll earn more interest.