In which situation is simple interest the most appropriate interest calculation to use?
A)When there is one compounding period
B)Never
C)Always
D)When there are two or less compounding periods

Question

Quizplus · Accepted Answer

Simple interest is the most appropriate when there is only one compounding period, as there are no additional interest calculations needed. If there are multiple compounding periods, using simple interest may result in an underestimation of the amount of interest earned or owed.

In Which Situation Is Simple Interest the Most Appropriate Interest