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