Sydney invested $10,000 for an indefinite period at 5% per year. At the end of each year, she receives a $500 check for interest earned. This type of account pays simple interest.

Question

Quizplus · Accepted Answer

In a simple interest account, interest is calculated only on the principal amount, not on accumulated interest. Sydney receives $500 annually, which is 5% of her initial $10,000 investment, indicating simple interest.

Sydney Invested $10,000 for an Indefinite Period at 5% Per