Question

saving money is important if you want to be financially secure. knowing how your savings can grow by themselves helps in planning for the future.
which of these describes how you can increase your savings through compounding?
choose 1 answer:
a you put money into an account every year.
b you make one big deposit.
c you save a certain amount every month, but dont earn any interest on it.
d your savings earn interest, and then that interest earns its own interest.

Explanation:

Compounding in finance refers to the process where the interest earned on an investment (or savings) is added to the principal, and then subsequent interest is calculated on the new, larger principal (including the previously earned interest). Option A is regular contributions, not compounding. Option B is a single deposit without the compounding mechanism. Option C has no interest, so no compounding. Option D correctly describes compounding as savings earn interest, and that interest then earns its own interest (interest on interest).

Answer:

D. Your savings earn interest, and then that interest earns its own interest.