Art Invested $100 Two Years Ago at 8 Percent Interest

Multiple Choice

Art invested $100 two years ago at 8 percent interest. The first year, he earned $8 interest on his $100 investment. He reinvested the $8. The second year, he earned $8.64 interest on his $108 investment. The extra $.64 he earned in interest the second year is referred to as:

A) free interest.
B) bonus income.
C) simple interest.
D) interest on interest.
E) present value interest.