Question

Which of the following terms BEST describes interest applied to both the principal and to any previously earned interest?

A). Steady interest
B). Simple interest
C). Compound interest
D). Exponential decay

Answer 1

C. Compound Interest

Answer 2

Answer: Option 'C' is correct.

Explanation:

Compound interest describes interest applied to both the principal and to any previously earned interest.

As we all know that compound interest is the interest in interest.

It is the method of reinvesting interest instead of paying it out.

Hence, option 'C' is correct.