Interest calculated solely on the principal amount borrowed or invested is known as compound interest.

Name: Interest calculated solely on the principal amount borrowed or invested is known as compound interest.
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Question

​Interest calculated solely on the principal amount borrowed or invested is known as compound interest.

Quizplus · Accepted Answer

Interest calculated solely on the principal amount borrowed or invested, without compounding, is known as simple interest. Compound interest, on the other hand, is calculated on the principal amount and also on the accumulated interest of previous periods.

​Interest Calculated Solely on the Principal Amount Borrowed or Invested

Interest Calculated Solely on the Principal Amount Borrowed or Invested