What is compound interest? A. The interest earned in the principle of an investment B. The interest earned on both the principal

Question

Softa [21]

3 years ago

15

What is compound interest? A. The interest earned in the principle of an investment B. The interest earned on both the principal

and interest of an investment or saving account C. The interest earned D. The interest on a loan

Social Studies

1 answer:

Nastasia [14] · Answer 1 · 2022-08-30T11:30:41+03:00

Answer:

B. The interest earned on the principal and the interest of an investment or a saving account is the correct answer.

Explanation:

The interest calculated on the initial principal is called Compound interest. All the accumulated interest of the previous periods are also included. It is interest on interest and makes the sum grow faster than simple interest. The simple interest is calculated only on the principal amount. The compound interest depends on the frequency of compounding. If the number of compounding period is higher then the compound interest is also higher.