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Tom invested $100 two years ago at 10 percent interest. The first year, he earned $10 interest on his $100 investment. He reinvested the $10.
Tom invested $100 two years ago at 10 percent interest. The first year, he earned $10 interest on his $100 investment. He reinvested the $10. The second year, he earned $11 interest on his $110 investment. The extra $1 he earned in interest the second year is referred to as:
A. | interest. |
B. | bonus interest. |
C. | simple interest. |
D. | interest on interest. |
E. | future value interest. |
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