What concept describes how quickly an investment increases in value when interest is paid not only on the original amount invested, but also on the accumulated interest payments?

Compound Interest

Step-by-step explanation:

When the interest is paid on principal amount only, then there is fixed return in case of a specified rate.

For example: Simple interest @ 5% on principal value of $100 shall be

$100 5% = $5 each year

Even though the interest amount is not withdrawn, and kept in the account earning this return.

Although, in case of compound interest:

Principal = $100

Rate = 5%

At the end of year 1, assuming interest is compounded each year

Value of interest = $100 5% = $5

Value of security or investment = $105

Second year interest = $105 5% = $5.25

Value = $105 + $5.25 = $110.25

Whereas in simple interest the value stays constant of principle on which interest is calculated = $100

Thus, total return in 2 years under simple interest  = $100 + $5 + $5 = $110

Whereas that in compounded interest, compounded annually = $100 + $5 + $5.25 = $110.25

Thus, value of money increases faster in compound interest.

439400

step-by-step explanation:

130^2 = 16900

16900*26 = 439400