Determine Whether the Statement Is True or False

question 155

Multiple Choice

Determine whether the statement is true or false. If it is true, explain why it is true. If it is false, give an example to show why it is false. ​
If compound interest is converted annually, then the accumulated amount after t years is not the same as the accumulated amount under simple interest over t years.

• A) False. Under compound interest , under simple interest. For example, if r=7%, P=$1,000, t=1 yr, so under compound interest A=1,070, and under simple interest A=1,070.
• B) True. This follows from the definitions of the accumulated amount for compound and simple interest.

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Definitions:

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