ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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are items of value that you own which may be appreciating or depreciating in value.
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allows you quick and easy access to your money without penalties.
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is interest earned on both principal and previous interest earnings.
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are things we desire to buy.
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Detailed explanation-1: -Most assets can either appreciate or depreciate. However, assets with a finite useful lifespan (e.g., machinery and equipment) are more prone to depreciation rather than appreciation. On the other hand, assets such as financial assets and real estate are expected to appreciate rather than depreciate.
Detailed explanation-2: -Appreciation is an increase in the value of an asset. On the flip side, depreciation is the decrease in the value of an asset. Assets such as vehicles and machinery with a finite usable lifespan are more likely to depreciate in value over time.
Detailed explanation-3: -What Is an Appreciating Asset? An appreciating asset is any asset which value is increasing. For example, appreciating assets can be real estate, stocks, bonds, and currency.
Detailed explanation-4: -For an asset to be depreciated, it must lose its value over time. For example, land is a non-depreciable fixed asset since its intrinsic value does not change. You cannot depreciate property for personal use and assets held for investment.
Detailed explanation-5: -Appreciation means that the value of a financial asset increases over time. This increase occurs for many different reasons, including increased demand, weakened supply, or a change in inflation or interest rates.