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When earning compound interest on money you invest, which statement is true?
A As time goes on and your bank account grows, you earn more interest.
B. As time goes on and your bank account grows, you earn less interest.
C. As time goes on and your bank account grows, you earn the same amount of interest.
D As time goes on and your bank account grows, you stop earning interest.

Respuesta :

Samawati

Answer:

A As time goes on and your bank account grows, you earn more interest.

Explanation:

A compound interest-earning account adds the interest it has earned in a particular period to the principal amount. This results in the principal amount increasing by the amount of interest earned in the period. Therefore, for compound interest, the principal amount is bigger at the beginning of every year.

In practice, interest is calculated based on the principal amount. If the principal amount is higher every period, the interest earned will also go up every year.

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