Tom Earned $120 in Interest on His Savings Account Last

question 13

Multiple Choice

Tom earned $120 in interest on his savings account last year.Tom has decided to leave the $120 in his account so that he can earn interest on the $120 this year.This process of earning interest on prior interest earnings is called:

• A)discounting.
• B)compounding.
• C)duplicating.
• D)multiplying.
• E)indexing.

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Definitions:

Berries

Small, juicy fruits that are typically round, soft, and of various colors - eaten as food.

Nuts

In an economic context, refers to commodities or tangible goods that are traded, consumed, and can affect markets, but more generally just a type of food.

Utility Function

A mathematical representation in economics that quantifies an individual's preference for certain goods or outcomes over others.

Nuts

Edible seeds typically encased in a hard shell, commonly consumed as snacks or used in various recipes.