The Notion of Compound Interest Means That

question 91

Multiple Choice

The notion of compound interest means that

• A) if you leave a lump sum (some dollar amount)in the bank for some period,it will only accumulate interest on the principal (the original amount you deposited).
• B) if you leave a lump sum (some dollar amount)in the bank for some period,it will accumulate interest both on the principal and on any accumulated interest.
• C) any amount you borrow will accumulate more and more interest,no matter how much you pay back.
• D) the demand for loanable funds is upward sloping.
• E) your interest will grow,but never at a rate higher than 13 percent.

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