Question

question 2 of 10
why does compound interest earn you a higher annual percentage yield (apy) on savings accounts?
a. compound interest gives you a yearly rate of return.
b. compound interest doesnt really earn you more apy.
c. compounding interest earns more by investing your money in stocks.
d. compounding means you earn interest on the money that has already earned interest.

Explanation:

Compound interest calculates interest on the initial principal and the accumulated interest from previous periods. This snow - balling effect leads to a higher APY compared to simple interest.

Answer:

D. Compounding means you earn interest on the money that has already earned interest.