Compound interest is computed on which of the following?
A)Only the original amount.
B)The original amount and any undistributed interest earned in prior periods.
C)The original amount and any distributed or undistributed interest earned in prior periods.
D)Only the distributed and undistributed interest earned in prior periods.

Question

Quizplus · Accepted Answer

Compound interest is calculated on the original amount as well as any undistributed interest earned in prior periods. This means that the interest earned in previous periods is added to the original amount, and the interest in the current period is calculated based on the new total.

Compound Interest Is Computed on Which of the Following