It is the interest added to the principal of an investment or a loan so that the added interest also earns interest from then on. a. compound b. simple c. rate d. principal
Compound interest adds the interest earned in the previous period to the principal amount, so the interest from previous periods also earns interest. This is an important tool to understand as it is used daily in loan, credit cards, and investments (including savings and some checking accounts.)
Answers & Comments
Answer:
A. Compound
Step-by-step explanation:
Compound interest adds the interest earned in the previous period to the principal amount, so the interest from previous periods also earns interest. This is an important tool to understand as it is used daily in loan, credit cards, and investments (including savings and some checking accounts.)
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