Tomas earned $89 in interest on his savings account last year and has decided to leave the $86 in his account this coming year so it will earn interest.This process of earning interest on prior interest earnings is called:
A)discounting.
B)compounding.
C)duplicating.
D)multiplying.
E)indexing.

Question

Quizplus · Accepted Answer

Compounding is the process of earning interest on prior interest earnings.

Tomas Earned $89 in Interest on His Savings Account Last