Which of the following statement is CORRECT regarding compound interest?
AIt earns profit not only on principal but also on interest.
BIt is the most basic form of calculating interest.
CIt is calculated by multiplying principal by rate multiplied by time.
DIt does not take into account the accumulated interest for calculation.
Correct answer
A. It earns profit not only on principal but also on interest.
Explanation
It earns profit not only on principal but also on interest. is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.