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

Question

Quizplus · Accepted Answer

Compound interest means that the interest earned on your savings is added to the principal, and then the new total earns more interest in the next period. This process allows your savings to grow at an accelerating rate. Simple interest, on the other hand, is calculated only on the principal amount, not on the interest earned. CDs (Certificates of Deposit) and investing are methods or vehicles for saving or investing money, but they do not define how interest is calculated or compounded.

With _____,The Interest Earned on Your Savings Is Added to the Money