Jamie earned $180 in interest on her savings account last year.She has decided to leave the $180 in her account so that she can earn interest on the $180 this year.The interest Jamie earns this year on this $180 is referred to as:
A)simple interest.
B)complex interest.
C)accrued interest.
D)interest on interest.
E)discounted interest.

Question

Quizplus · Accepted Answer

The interest Jamie earns this year on the $180 she earned in interest last year is referred to as "interest on interest." This is because the initial $180 is now added to the principal and earns interest along with the original amount. This is also known as compound interest.

Jamie Earned $180 in Interest on Her Savings Account Last