Interest Earned on Both the Initial Principal and the Interest

question 10

Multiple Choice

Interest earned on both the initial principal and the interest reinvested from prior periods is called:

• A)free interest.
• B)dual interest.
• C)simple interest.
• D)interest on interest.
• E)compound interest.

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Definitions:

Horizontal Merger

A business consolidation that occurs between firms operating in the same industry, often aiming to increase market share.

Conglomerate Merger

A union between firms that are involved in totally unrelated business activities.

Vertical Merger

A merger between companies in the same industry but at different stages of the production process, aiming at creating efficiencies or reducing costs.

Consolidation

The process of combining multiple accounts or businesses into a single entity, often for the purpose of simplifying financial statements or achieving operational efficiencies.