True or false: telling them apart

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   Equal yearly interest indicates simple interest.

2. Statement is true

   Yes

   Statement

   Rising yearly interest indicates compounding.

3. Statement is true

   No

   Statement

   Both give identical totals over any term.

4. Statement is true

   Yes

   Statement

   Compound interest exceeds simple interest from year two.

5. Statement is true

   Yes

   Statement

   The amount is principal plus interest in both cases.

Explanation