The process of earning interest on interest, as well as on the principal, is called
A) insuring
B) reserving
C) gouging
D) compounding

Question

Quizplus · Accepted Answer

Compounding refers to the process where the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes. This is often referred to as "interest on interest," and it can significantly increase the value of investments over time.

The Process of Earning Interest on Interest, as Well as on the Principal