Compound interest:
A) describes how quickly an interest-bearing asset increases in value.
B) measures the rate of return of a portfolio of stocks and bonds.
C) measures the after-tax,inflation-adjusted rate of interest.
D) refers to the multiple rates of interest of various types of bonds in a portfolio.

Question

Quizplus · Accepted Answer

Compound interest refers to the interest earned on the principal amount as well as the accumulated interest from previous periods, which causes the asset to increase in value at an accelerating rate over time.

Compound Interest