Question: Compounding is the process by which interest earned on an investment is reinvested so that in future periods, interest is earned on the interest previously

Compounding is the process by which interest earned on an investment is reinvested so that in future periods, interest is earned on the interest previously earned as well as the original principle.

A) True

B) False

Compound interest consists of both simple interest and interest on interest

A)True

B) False

Compounding accelerates the growth of the total interest earned.

A)True

B) False

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