Compound Interest Differs from Simple Interest Because Compound Interest Is

question 14

Multiple Choice

Compound interest differs from simple interest because compound interest is interest paid on

• A) the original deposit only,whereas simple interest is interest paid only on the original deposit but not on all previously accumulated interest.
• B) all previously accumulated interest,whereas simple interest is interest paid not only on the original deposit but on all previously accumulated interest.
• C) the original deposit only,whereas simple interest is interest paid only on all previously accumulated interest.
• D) the original deposit and on all previously accumulated interest,whereas simple interest is interest paid on all previously accumulated interest.
• E) the original deposit and on all previously accumulated interest,whereas simple interest is interest paid on the original deposit only.

---

Definitions:

Marginal Cost

The financial charge for creating one additional unit of a product or service.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the cost of producing one more unit.

Market Price

The contemporary pricing at which a good or service is available for trading in a market context.

Purely Competitive Market

An economic setup marked by the presence of numerous small-sized companies, identical products, and straightforward market entry and exit, culminating in firms accepting prevailing market prices.