Which is better for whom?

Exercise and reference answers

Questions

1. Question

   Over a long term, compound interest favours

   Choices

   1. nobody
   2. the saver
   3. the lender only

   Correct choice

   the saver

2. Question

   On a loan, compounding costs the borrower

   Choices

   1. less
   2. the same
   3. more than simple interest

   Correct choice

   more than simple interest

3. Question

   In the very first year, the two are

   Choices

   1. equal
   2. different
   3. not comparable

   Correct choice

   equal

Explanation