Compound interest means that you earn:

A) Interest only on the initial amount invested.
B) Interest on the initial principal only.
C) Interest on both the principal and prior reinvested interest.
D) A decreasing amount of interest each year.
E) The same amount of interest each year.

Compound Interest

Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Reinvested Interest

Reinvested interest is the compounding of interest by adding the payments back to the principal amount instead of paying it out, thereby increasing the total interest earned over time.