Questions: Learning - Courses 2.4.2 Test (CST): Savings and Investing Question 15 of 20 Which statement describes a benefit of starting to save for retirement early? A. Tax rates will increase over time, so the sooner you invest, the less you will pay in taxes. B. Compounding interest means the longer you save, the more money your investment will earn. C. The longer you own stocks, the more money the stocks will earn. D. The value of your investments will always increase over time. SUBMIT PREVIOUS

The answer is B. Compounding interest means the longer you save, the more money your investment will earn.

This statement is not necessarily true. While tax rates can change over time, they are not guaranteed to increase. Additionally, investing early does not directly correlate with paying less in taxes.

This is the correct statement. Compounding interest is a powerful financial concept where the interest earned on an investment is reinvested to earn additional interest. The earlier you start saving, the more time your money has to grow through compounding, leading to potentially larger returns over time.

While historically, stocks have tended to increase in value over the long term, this is not guaranteed. Stock prices can be volatile and may not always result in earnings.

This statement is incorrect. While investments can grow over time, they can also decrease in value due to market fluctuations and other economic factors. There is no guarantee that the value of investments will always increase.