When calculating accrued interest over several years that compounds annually, you must _____.

Question

(1 point)
Responses

calculate a new principal each year, adding in the accrued interest from the previous year
calculate a new principal each year, adding in the accrued interest from the previous year

use the I = Prt formula where t = the number of years
use the I = Prt formula where t = the number of years

calculate the interest for each year and add all the years' interest amounts to the original principal
calculate the interest for each year and add all the years' interest amounts to the original principal

none of the above

Answer 1

calculate a new principal each year, adding in the accrued interest from the previous year