With _____,the interest earned on your savings in a given time period is added to the money in your savings account,and the new total (principal plus interest)earns more interest.

Question

Quizplus · Accepted Answer

Compounding involves adding the interest earned on your savings to the principal amount, which then earns more interest in the next period. This process allows your savings to grow at an increasing rate over time. Simple interest, on the other hand, calculates interest based only on the principal amount, without compounding. APY (Annual Percentage Yield) takes into account compounding when expressing the annual rate of return, but it is a rate rather than a process. Bonds are a form of investment that may involve interest payments, but the concept of compounding is not inherent to bonds themselves.

With _____,The Interest Earned on Your Savings in a Given