Earning interest on previously earned interest is called

Question

Quizplus · Accepted Answer

Compounding is the process of earning interest on both the initial principal and the accrued interest. This results in exponential growth of the investment over time, making it a lucrative option for those looking to maximize their returns. Liquidity refers to the ease with which an asset can be converted into cash, minimum deposit is the minimum amount required to open an account, rate of return is the amount earned on an investment over a certain period of time, and safety refers to the level of risk associated with the investment. While these factors are also important to consider, compounding is a key factor in the growth of an investment.

Earning Interest on Previously Earned Interest Is Called