Tom Earned $120 in Interest on His Savings Account Last

Multiple Choice

Tom earned $120 in interest on his savings account last year.Tom has decided to leave the $120 in his account so that he can earn interest on the $120 this year.This process of earning interest on prior interest earnings is called:

A) discounting.
B) compounding.
C) duplicating.
D) multiplying.
E) indexing.