By Definition, a Bank That Pays Simple Interest on a Savings

question 29

Multiple Choice

By definition, a bank that pays simple interest on a savings account will pay interest:

• A)only at the beginning of the investment period.
• B)on interest.
• C)only on the principal amount originally invested.
• D)on both the principal amount and the reinvested interest.
• E)only if all previous interest payments are reinvested.

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Definitions:

Taxed

Subjected to a financial charge or levy by a government on income, goods, or activities.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount increases, resulting in those who have higher incomes being taxed at a higher rate.

Progressive Tax

A taxation system where the tax rate increases as the taxable amount or income increases.

Proportional Tax

A tax system wherein the tax rate is fixed and applied uniformly to all taxpayers, regardless of their income level.