Jamie earned $14 in interest on her savings account last year.She has decided to leave the $14 in her account so that she can earn interest on the $14 this year.The interest earned on last year’s interest earnings is called:
A)simple interest.
B)complex interest.
C)accrued interest.
D)interest on interest.
E)discounted interest.

Question

Jamie earned $14 in interest on her savings account last year.She has decided to leave the $14 in her account so that she can earn interest on the $14 this year.The interest earned on last year&#8217;s interest earnings is called:
A)simple interest.
B)complex interest.
C)accrued interest.
D)interest on interest.
E)discounted interest.

Quizplus · Accepted Answer

The interest earned on last year's interest earnings is called "interest on interest," also known as "compound interest." This occurs when the interest earned in one period is added to the principal balance and then earns interest in the next period.

Jamie Earned $14 in Interest on Her Savings Account Last