Which of the following statements about compound interest is correct?

Type: MCQ • Marks: 1

A. Interest is calculated only on the original principal forever

B. Interest may be added to the principal at prescribed intervals, so subsequent interest can be earned/charged on the accumulated amount

C. It never depends on time

D. It is always lower than simple interest

Explanation

Compound interest incorporates previously accrued interest into the calculation base according to the compounding terms.

Want to attempt the full test series with a timer and instant score? Purchase the package to unlock the complete test. Purchase Now

UPSC Principal & Vice Principal Management Finance Administration

This page is indexed for search so students can find questions directly from Google.

Welcome to TutorWale!