Consider two investments, one earning simple interest and one earning compound interest. If both start with...
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Consider two investments, one earning simple interest and one earning compound interest. If both start with the same initial deposit (and you make no other deposits or withdrawals) and earn the same annual interest rate, how will the balance in the simple interest account compare to that of the compound interest? CELOR Choose the correct answer below. OA. The account with simple interest will have a smaller balance than the account with compound interest because the more times interest is applied to an investment, the smaller the balance. OB. The account with simple interest will have a greater balance than the account with compound interest because compound interest is interest paid only on the original investment. OC. The account with simple interest will have a smaller balance than the account with compound interest because compound interest is interest paid both on the original investment and on all interest that has been added to the original investment. OD. The account with simple interest will have the same balance as the account with compound interest because the annual interest rates are equal. OE. The account with simple interest will have the same balance as the account with compound interest because the initial deposits are equal. Consider two investments, one earning simple interest and one earning compound interest. If both start with the same initial deposit (and you make no other deposits or withdrawals) and earn the same annual interest rate, how will the balance in the simple interest account compare to that of the compound interest? CELOR Choose the correct answer below. OA. The account with simple interest will have a smaller balance than the account with compound interest because the more times interest is applied to an investment, the smaller the balance. OB. The account with simple interest will have a greater balance than the account with compound interest because compound interest is interest paid only on the original investment. OC. The account with simple interest will have a smaller balance than the account with compound interest because compound interest is interest paid both on the original investment and on all interest that has been added to the original investment. OD. The account with simple interest will have the same balance as the account with compound interest because the annual interest rates are equal. OE. The account with simple interest will have the same balance as the account with compound interest because the initial deposits are equal.
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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