Question

If Marjorie makes an investment of principal, and leaves the full amount, both principal and interest in the account to some time in the future when she withdraws all funds, she is earning what type of interest

Answer 1

Answer: Compounding

Step-by-step explanation:

Based on the information given, we can infer that Marjorie earns a compounding interest. The compound interest is the interest on a loan that is calculated based on the initial principal as well as the interest that is accumulated from the previous periods. In compounding interest, the interest is earned on the principal and the interest amount. The compounding interest is also referred to as the interest on interest.