Interest on savings is calculated by multiplying the principal amount times the opportunity cost times the annual interest rate.

Question

Quizplus · Accepted Answer

Interest on savings is typically calculated by multiplying the principal amount by the annual interest rate, and sometimes considering the compounding period, not by multiplying with the opportunity cost. Opportunity cost refers to the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Interest on Savings Is Calculated by Multiplying the Principal Amount