Answer:
Step-by-step explanation:
Compound growth is relevant to Charles and Ebony's budget in the sense that it can help them plan for their future financial goals. Compound growth refers to the phenomenon where an investment or savings account earns interest on both the initial amount invested as well as the interest earned over time. This means that over time, the interest earned on the initial investment will grow, leading to a larger overall return.
For Charles and Ebony, this means that if they invest or save a certain amount of money now and let it grow over time, they will have more money in the future than if they had simply saved the same amount of money without earning interest. This can be particularly useful for long-term financial goals such as retirement savings or purchasing a home. By understanding the power of compound growth, Charles and Ebony can make informed decisions about how much to save and invest now in order to reach their desired financial goals in the future.
For example, if Charles and Ebony set aside $100 every month and invest it in an account that earns an interest rate of 7% per year, after 20 years they would have $55,857. This is a significant amount of money that they can use to reach their financial goals, such as buying a house or saving for retirement.
In conclusion, compound growth is relevant to Charles and Ebony budget because it can help them plan for their future financial goals by understanding the power of compound growth. It's important for them to understand how much they should save and invest now in order to reach their desired financial goals in the future. Compound growth can help them grow their savings and investments over time and reach their financial goals faster.