Compound interest:
A)Is interest only on the principal amount for several years.
B)Is interest on the principal and previously earned interest.
C)Is interest only on previous interest excluding the principal.
D)Is equal to simple interest received for several years.

Question

Quizplus · Accepted Answer

Compound interest is interest that is earned not only on the principal amount, but also on the previously earned interest. This can lead to exponential growth of the invested amount over time.

Compound Interest