Question:
Which describes the difference between simple and compound interest?
A. Simple interest is paid on small, short-term loans, while compound interest is paid on large, long-term loans.
B. Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.
C. Simple interest is paid on large, long-term loans, while compound interest is paid on small, short-term loans.
D. Simple interest is paid on the principal and interest accrued, while compound interest is paid only on the principal.
Answer:
B. Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.
