Which of the following is NOT a characteristic of interest?
A)It must represent compensation for use of a principal amount.
B)It must accrue continuously over time.
C)It must be paid on a regular, periodic basis.
D)It must be calculated with reference to a principal amount.

Question

Quizplus · Accepted Answer

While the other characteristics listed (compensation for use of a principal amount, accrual over time, and calculation with reference to a principal amount) are all key components of interest, being paid on a regular, periodic basis is not necessarily required for something to qualify as interest. For example, a loan with a balloon payment at the end may still involve interest, even if no payments are made until the end of the loan term.

Which of the Following Is NOT a Characteristic of Interest