The process of earning interest on accumulated interest or paying interest on accumulated interest due is called
A) simple interest.
B) compounding.
C) future value.
D) present value.

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 concept is key in finance and affects both investments and loans.

The Process of Earning Interest on Accumulated Interest or Paying