Why is compound interest preferable to simple interest?

compound interest pays at least double the interest on the principal during each month.
compound interest is paid by the week or by the month, not only once during a year.
compound interest is based on the entire principal, not just a percentage of the principal.
compound interest pays interest on the principal and the interest earned in each period.

The answer is: Compound interest pays interest on the principal and the interest earned in each period.

For example, let's say that you had an investment of $ 10 with an interest of 10% each month.

Using simple interest, your investment for the first two months would grow in this amount:

month 1= 10 + (10% x 10)  

monthh 2 = 11 + (10% x10)

But, using compound interest, your investments for the first two months would become:

month 1 = 10 + (10% x 10)  

month 2  = 11 + (10% x 11)

the correct answer is b

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