The term 'simple',with regard to interest,refers to the fact that:
A) the interest calculation is easy to work out.
B) principal repayment is guaranteed.
C) interest payments are guaranteed.
D) interest is calculated on the initial principal only.

Question

Quizplus · Accepted Answer

The term 'simple' refers to the fact that interest is calculated on the initial principal only and not on any interest earned over time. This is in contrast to compound interest, where interest is calculated on both the original principal and any accumulated interest. Therefore, option D is the correct answer. Options A, B, and C are incorrect as they do not relate to the term 'simple' specifically in the context of interest calculations.

The Term 'Simple',with Regard to Interest,refers to the Fact That