Answers CMS 2026-2027 Economics and Personal Finance CREDIT RECOVERY PretestQuestion 10

10

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Question 10 • CMS 2026-2027 Economics and Personal Finance CREDIT RECOVERY

Which describes the difference between simple and compound interest?

Answer

A

Simple interest is paid on small, short-term loans, while compound interest is paid on large, long-term loans.

B

Simple interest is paid on the principal and interest accrued, while compound interest is paid only on the principal.

C

Simple interest is paid on large, long-term loans, while compound interest is paid on small, short-term loans.

D

Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.

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