Compound interest means that a savings account earns interest on the interest previously earned.

Name: Compound interest means that a savings account earns interest on the interest previously earned.
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Compound interest is the process of earning interest not only on the principal amount deposited in a savings account but also on the interest previously earned. This results in a larger balance over time compared to simple interest, where interest is only earned on the principal amount.

Compound Interest Means That a Savings Account Earns Interest on the Interest