Which of the Following Statements Is True

question 2

Multiple Choice

Which of the following statements is true?

• A)Simple interest pays interest only on principle whereas compound interest also pays interest on interest.
• B)Simple interest relates to future value whereas compound interest relates to present value.
• C)Simple interest applies when an investor receives payment while compound interest applies when an investor makes payments.
• D)Simple interest annualises rates while compound interest allows interest to be stated in any time period.
• E)Simple interest relates to present value whereas compound interest relates to future value.

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Definitions:

Compensation Rates

The amount of pay or benefits that an employee receives from their employer for their work.

Internal Equity

The practice of ensuring that employees are compensated fairly in relation to one another within the same organization.

External Equity

The fairness of an employee's compensation as compared to what others in the external job market are receiving for similar work.