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Compound Interest ONQ

This exercise focuses on key investment concepts including dollar cost averaging, the rule of 72, the importance of diversification, and strategic investment decisions during market downturns. Additionally, it incorporates a practical calculation to determine the future value of an investment. You'll answer questions that encourage critical thinking about how to manage investments wisely, even in volatile environments. Make sure to consult your notes and use a calculator to assist with numerical problems.

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Compound Interest ONQ

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  1. Compound Interest ONQ 5 Questions Answer on a separate sheet of paper You may consult your notes. Get a calculator Thank You for following directions.

  2. 1. Define dollar cost averaging.

  3. 2. What is the rule of 72 used to determine?

  4. 3. Why should you diversify your investments?

  5. 4. Why would you still use dollar cost averaging when the stock market is down?

  6. 5. Diana finds an account that earns 10%. How much will her $1500.00 be worth at this rate in20 years?

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