ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Interest earned on the principal investment.
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any form of interest earned from saving or investing.
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Earning interest on interest.
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The effect interest has the the total return on interest.
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Detailed explanation-1: -In simple terms, compound interest is interest you earn on interest. With a savings account that earns compound interest, you earn interest on the initial principal plus on the interest that accumulates over time.
Detailed explanation-2: -Compound interest is the interest on a deposit calculated based on both the initial principal and the accumulated interest from previous periods. 1. Or, more simply put, compound interest is interest you earn on interest . You can compound interest on different frequency schedules such as daily, monthly or annually.
Detailed explanation-3: -If your investment account earns compound interest, then you are earning interest on interest as well as on your investments. Compound interest is undoubtedly the most important concept to understand when building wealth for the long term.
Detailed explanation-4: -Certificates of deposit (CDs) High-yield savings accounts. Bonds and bond funds. Money market accounts. Dividend stocks. Real estate investment trusts (REITs) 02-Aug-2022