The primary difference between simple and compound interest is that:
A) Simple interest is only paid at the end of the investment period.
B) Compound interest entails receiving interest payments on previously earned interest.
C) Compound interest is paid up front and not when the investment matures.
D) Simple interest is not taxed by the federal government.
E) Simple interest earns a higher interest rate on reinvested interest than compound interest.
Correct Answer:
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