Answer:
b. payment of interest on previously earned interest.
Explanation:
In economics, simple interest happens when the interest that is accumulated within a period is not added to the main amount of debt or investment. On the contrary, compound interest means that the interest accumulated during a certain period are summed to the principal sum of debt or investment, actually increasing the value of the loan or deposit.
Compound interest is the interest that is earned by levying om the interset. It is with the initial principal and leads to a huge amount of wealth with more periods of compounding periods.
The correct answer is b. payment of interest on previously earned interest.
Option b. payment of interest on previously earned interest is correct because, in economics, simple interest happens when the interest that is accumulated within a period is not added to the main amount of debt or investment. On the contrary, compound interest means that the interest accumulated during a certain period is summed to the principal sum of debt or investment, actually increasing the value of the loan or deposit.
To know more about the compound interest, refer to the link below:
https://brainly.com/question/14267879
