True or false: interest

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   Banks pay interest on money deposited with them.

2. Statement is true

   Yes

   Statement

   People pay interest when they borrow money.

3. Statement is true

   Yes

   Statement

   Amount equals principal plus interest.

4. Statement is true

   No

   Statement

   Compound interest is calculated on the original principal each year.

5. Statement is true

   Yes

   Statement

   Compound interest uses the previous year's amount as its base.

Explanation