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?

Answer:Compound InterestStep-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@ 5% on principal value of $100 shall be$100 [tex]\times[/tex] 5% = $5 each yearEven though the interest amount is not withdrawn, and kept in the account earning this return.Although, in case of compound interest:Principal = $100Rate = 5%At the end of year 1, assuming interest is compounded each yearValue of interest = $100 [tex]\times[/tex] 5% = $5Value of security or investment = $105Second year interest = $105 [tex]\times[/tex] 5% = $5.25Value = $105 + $5.25 = $110.25Whereas in simple interest the value stays constant of principle on which interest is calculated = $100Thus, total return in 2 years under simple interest  = $100 + $5 + $5 = $110Whereas that in compounded interest, compounded annually = $100 + $5 + $5.25 = $110.25Thus, value of money increases faster in compound interest.