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Interest earned in later periods on interest already earned is called:
ACombined interest
BConstant interest
CCompound interest
DComplex interest
Answer & Solution
Correct answer: C. Compound interest
1. Simple interest covers the first year only.
2. Interest on interest follows after.
3. It is compound interest.
_Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._
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