A method of calculating interest in which,during the entire term of the loan,interest is computed on the original sum borrowed is the:
A)present value method.
B)simple interest method.
C)compound interest method.
D)interest rate method.

Question

Quizplus · Accepted Answer

The simple interest method calculates interest based on the original sum borrowed, without taking into account any additional interest accrued over time. This is different from the compound interest method, which takes into account the accrued interest and adds it to the principal over time. The present value method and interest rate method are not methods of calculating interest.

A Method of Calculating Interest in Which,during the Entire Term