Final answer:Compound interest on a savings account is the interest paid on both the initial deposit and the accumulated interest over time. It's typically lower than CD rates due to the liquidity of savings accounts.Explanation:The termcompoundinterest for a savings account refers to the process of earning intereston both the initial deposit, or principal, and the interest that has been added to your account. This means if you initially deposit a certain amount in a savings account, the bank pays you interest on that amount. After a certain period, the bank again pays you interest but this time, it's calculated based on the initial deposit plus the interest already earned. This process continues for as long as you keep your money in the savings accountFor example, if you deposit $100 at an interest rate of 5%, after one year you'll have $105. The next year, you will earn interest not only on the original $100 but also on the $5 interest from the first year, giving you a total of $110.25. Each subsequent year, your interest will be calculated on a gradually increasing base amount. Interest rates these days are typically lower than CD rates due to the need for investors to receive a slightly higher interest rate to compensate for the promise not to touch their deposits for a given period of time, living a lifestyle of low liquidity.Learn more about Compound Interest here:brainly.com/question/34614903#SPJ11...

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