Start learning →

Simple interest or compound interest?

Exercise and reference answers

Items
  1. Item
    Always calculated on the original principal
    Category
    Simple interest
  2. Item
    The same interest is earned every year
    Category
    Simple interest
  3. Item
    Interest for 2 years is just twice one year's
    Category
    Simple interest
  4. Item
    Calculated on the previous year's amount
    Category
    Compound interest
  5. Item
    The interest grows year on year
    Category
    Compound interest
  6. Item
    Uses A = P + I as the next year's base
    Category
    Compound interest
Categories
  1. Item
    Simple interest
  2. Item
    Compound interest

Explanation

Simple interest always uses the original principal compound interest is worked out on the previous year's amount. Source: syllabus Maths, Ch 7 Comparing Quantities.
Continue learning with Quill →

Browse more AFCAT questions and exercises →