The interest that is earned or charged on both the principal amount and on the accrued interest that has been previously earned or charged is
A)compound interest.
B)simple interest.
C)stated interest.
D)accrued interest.

Question

Quizplus · Accepted Answer

Compound interest is the interest that is earned or charged on both the principal amount and on the accrued interest that has been previously earned or charged. Simple interest only earns interest on the principal amount, while stated interest is the rate of interest that is specified upfront and does not take into account any compounding. Accrued interest is the interest that has been earned but not yet paid or received.

The Interest That Is Earned or Charged on Both the Principal