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Interest that is computed on the principal and then added to it.

Sagot :

Answer:

Simple Interest

Explanation:

Simple interest is interest calculated on the principal portion of a loan or the original contribution to a savings account. Simple interest does not compound, meaning that an account holder will only gain interest on the principal, and a borrower will never have to pay interest on interest already accrued.

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Answer:

Compound interest

Step-by-step explanation:

Compound interest calculates the total interest payment using a variable principal amount. The interest that is accrued over time is added to the principal amount. For example, the interest for the first year is calculated as a proportion of the initial principal.