The Notion of Compound Interest Means That

Multiple Choice

The notion of compound interest means that

A) if you leave a lump sum (some dollar amount) in the bank for some period,it will only accumulate interest on the principal (the original amount you deposited) .
B) if you leave a lump sum (some dollar amount) in the bank for some period,it will accumulate interest both on the principal and on any accumulated interest.
C) any amount you borrow will accumulate more and more interest,no matter how much you pay back.
D) the demand for loanable funds is upward sloping.
E) your interest will grow,but never at a rate higher than 13 percent.