We call the process of earning interest on both the original deposit and on the earlier interest payments
A) simple interest.
B) compounding.
C) future value.
D) discounting.

Question

Quizplus · Accepted Answer

Compounding refers to the process where the value of an investment increases because the earnings on an investment, both capital and interest, earn interest as time passes. This is different from simple interest, where only the original principal earns interest.

We Call the Process of Earning Interest on Both the Original