Question

a person buys a tax deferred investment. tax deferred means that○ earning interest is not added to the investment until taxes are paid.○ dividends are added to the investment before taxes are paid.○ taxes are paid when the money is withdrawn from the investment.○ capital gains are taxed in the future.

Explanation:

A tax-deferred investment allows earnings (interest, dividends, capital gains) to grow without being taxed immediately. The core feature is that tax obligations are postponed until the investor withdraws funds from the investment account. Other options are either incorrect or incomplete: interest/dividends are added to the investment upfront, and "capital gains are taxed in the future" is too narrow (tax-deferral applies to all earnings, not just capital gains).

Answer:

taxes are paid when the money is withdrawn from the investment.