Question

I believe it's D?
Please check my answer, A and B confuse/throw me off.
@jdoe0001
@Sionainn

Answer 1

simple interest earnings means
say you loan 100 to peter for 3 years at 10%

so after 3 years he owes you 10% of 100

if you loan him 100 at compounding interest say per year
that means he owes 10 for the 1st year... so 110
and then the 2nd year he owes 10% of 110 so 110+ 11 = 121

and on the 3rd year he owes 10% of 121

Answer 2

compounding interest means.... the interest rate applies to the accrued balance
not the initial balance

because the accrued balance is getting more as years go by, the percent is also bigger each time

Answer 3

less accrue balance=lower interest rate ?

Answer 4

@jdoe0001

Answer 5

the interest rate is fixed and it is independent of the balance (it's usually set by other market forces such as the Federal Reserve interest rate)

Answer 6

@jim_thompson5910 *I thought it was making the account grow slower? D?*

Answer 7

that is correct. The less money you have in the account, the less it grows because the interest you earn is based on how much is in the account (the higher the balance, the more interest that is compounded and it snowballs from there)

Answer 8

That's what I said initially and no one answered me whether I was correct! :/
Thank you; always to the rescue!! lol

Answer 9

oh sry I looked over that part, but yes you are correct

Answer 10

(When I wrote that it wasn't in reference to you, lol)