QuestionAugust 18, 2025

True or False:Compound interest includes the interest that an investor earns on the original investment plus interest earned on the interest. True False

True or False:Compound interest includes the interest that an investor earns on the original investment plus interest earned on the interest. True False
True or False:Compound interest includes the interest that an investor earns on
the original investment plus interest earned on the interest.
True
False

Solution
4.5(206 votes)

Answer

True Explanation 1. Define Compound Interest Compound interest is calculated on the initial principal, which also includes all of the accumulated interest from previous periods. 2. Determine if Statement is True or False The statement describes compound interest accurately as it includes interest on both the original investment and the accumulated interest.

Explanation

1. Define Compound Interest<br /> Compound interest is calculated on the initial principal, which also includes all of the accumulated interest from previous periods.<br />2. Determine if Statement is True or False<br /> The statement describes compound interest accurately as it includes interest on both the original investment and the accumulated interest.
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