Mathematics for IGCSE & O level - Percentages (Section 2 - No. 23)

Given that an investment earns compound interest, which statement is true about how it is calculated?

Interest is earned only on the principal

Interest earned in each period is added to the principal

Interest is earned on the initial investment at the end of the term

Interest is calculated annually

Compound interest is calculated by adding the interest from each period to the principal amount.