1. The problem asks: Compound interest is most commonly used in which of the following? Penalties, short-term loans, savings and investments, or customs duties. 2. Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. 3. It is commonly used in savings and investments because it allows the money to grow exponentially over time. 4. Penalties, short-term loans, and customs duties typically use simple interest or fixed fees rather than compound interest. 5. Therefore, the correct answer is savings and investments. Final answer: savings and investments.