alleryStart learning →Simple interest is worked out on which amount only?
AThe interest earned
BThe accumulated amount
CThe remaining balance
DThe principal amount
Answer & Solution
Correct answer: D. The principal amount
1. The amount put in at the start is called the principal amount.
2. Simple interest is calculated only on that initial amount.
3. The interest earned is therefore the same in every year of the investment.
4. Compound interest is the other case, where earned interest also earns interest.
_Source: Siyavula Mathematics Grade 11 (Everything Maths, CC BY 4.0), Chapter 9: Finance, growth and decay_
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