How is simple interest calculated?A.It is calculated on the collateral on the loan.B.It is calculated on the compound interest of the loan.C.It is calculated on the annual percentage yield.D.It is calculated on the principal amount of the loan.SUBMITarrow_backPREVIOUS
Question
How is simple interest calculated?A.It is calculated on the collateral on the loan.B.It is calculated on the compound interest of the loan.C.It is calculated on the annual percentage yield.D.It is calculated on the principal amount of the loan.SUBMITarrow_backPREVIOUS
Solution
Simple interest is calculated on the principal amount of the loan. This means option D is correct.
Here is the step by step process of how simple interest is calculated:
Step 1: Identify the principal amount. This is the initial amount of the loan or investment.
Step 2: Identify the rate of interest. This is usually given as a yearly rate and it is expressed as a percentage.
Step 3: Identify the time period for which the money is borrowed or invested. This is usually expressed in years.
Step 4: Use the simple interest formula to calculate the interest: Simple Interest = Principal amount (P) x Interest Rate (r) x Time (t)
So, if you have a loan of $1000 with an interest rate of
Similar Questions
Simple interest rate for a term deposit implies that A.interest are calculated with respect to the initial investment in the term depositB.interest for a given compounding period is calculated with respect to the original amount invested in the term deposit plus the last interest paid.C.interest is calculated with respect to an amount that incorporates all previous interestsD.the interest rate is variable.
Implement a program to calculate the Simple Interest by using the formula given below and display the calculated Simple Interest.Simple Interest = (principal*rate of interest*time)/100
The main mathematical operation to perform when calculating with the simple interest formula is
Which describes the difference between simple interest and compound interest?Group of answer choicesSimple interest is always a whole number. Compound interest has a decimal portion.Simple interest is calculated every period. Compound interest is calculated one time.A graph of simple interest will curve upward. A graph of compound interest will be a straight line.Simple interest is calculated on the original amount. Compound interest is calculated on the total of the original amount and any money earned in interest.
How is compound interest different from simple interest?A.Compound interest accrues daily, monthly, or quarterly rather than annually.B.Compound interest accrues only on the initial amount borrowed.C.Compound interest accrues on the interest, as well as the principal.D.Compound interest accrues on the down payment as well as the principal.SUBMITarrow_backPREVIOUS
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