You invest $1,000 in an account paying 5% simple interest. You do not add nor withdraw any funds from this account. Every year, your account balance will:
A) Remain constant.
B) Increase at an increasing rate.
C) Increase at a constant rate.
D) Increase at a decreasing rate.
E) Increase by a constant amount.

Question

Quizplus · Accepted Answer

With simple interest, the account balance increases by a constant amount each year, which is the interest calculated on the initial principal.

You Invest $1,000 in an Account Paying 5% Simple Interest