You are deciding whether to start a 40-year retirement investing plan now,or ten years from now.You think rates of return will be about the same in the future as they are now.Discussion in the text of this decision shows
A)very little difference in the future value of an investment made now versus one made 10 years from now.
B)an investment made now will accumulate about 20% more (at a 10% rate of interest,compounded annually)than the investment made later.
C)the same facts as in response b,but the accumulation is only 10% greater.
D)that you will accumulate more in the additional 10 years than you do for the first 30 years.

Question

Quizplus · Accepted Answer

Starting an investment plan earlier takes advantage of the power of compound interest, meaning the interest you earn generates its own interest over time. Over a long period, such as 40 years, the initial years of investment are crucial because the compound interest has more time to work, leading to significantly higher accumulation by the end. Therefore, the additional 10 years at the beginning of the investment period can result in the investment growing more than it does in the first 30 years, due to the exponential nature of compound growth.

You Are Deciding Whether to Start a 40-Year Retirement Investing