Only The Most Financially Savvy Can Pass This Monetary Terms Quiz

General Knowledge 1/13/20

What is compounding?

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Stack of twenty dollar bills sit in a factory machine.
Retry Correct Incorrect Compounding is sometimes considered an interest on interest. That’s because the interest rate applies to both the principle and the interest that has since accumulated. Compounding occurs at a set period, such as monthly or continuously.
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Ricky Carioti/The Washington Post via Getty Images
Ricky Carioti/The Washington Post via Getty Images

What is compounding?

  • Decreasing value of an asset
  • Interest on interest
  • Linear growth
  • Interest on the principle
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