Which of the following best describes compound interest?

مندرجہ ذیل میں سے کون سا کمپاؤنڈ دلچسپی کی بہترین وضاحت کرتا ہے؟

Interest calculated on the initial principal only

Interest that remains constant over time

Interest calculated on both the initial principal and the accumulated interest

Interest that decreases over time

Compound interest: Interest on both principal and accrued interest.

It leading to exponential growth and a snowball effect.