Question

understanding compound grow
the most powerful way to grow your money is by keeping it in an account
that offers compound growth.
among the accounts listed, which accounts have compound growth?
choose all answers that apply:
a individual retirement account (ira)
b 401(k)
c certificate of deposit (cd)
d checking account
e debit card

Explanation:

• Individual Retirement Account (IRA): IRAs are investment accounts for retirement, and the earnings (interest, dividends, capital gains) can compound over time as the returns are reinvested.
• 401(k): A 401(k) is a retirement savings plan where the contributions and the earnings on those contributions (like interest or investment returns) can compound, as the growth is reinvested and earns more over time.
• Certificate of Deposit (CD): CDs typically earn compound interest, where the interest earned is added to the principal, and then future interest is calculated on the new, larger principal amount.
• Checking account: Most checking accounts earn very little or no interest, and even if they do, it's often simple interest or minimal, not typically compound growth in a significant way for growth - oriented purposes.
• Debit card: A debit card is a payment tool, not an account that offers growth (compound or otherwise); it's used to access funds in a checking account, not a growth - focused account.

Answer:

A. Individual Retirement Account (IRA)
B. 401(k)
C. Certificate of Deposit (CD)