Which of the following methods of calculating interest results in the lowest interest charges?

Question

Quizplus · Accepted Answer

Simple interest is the best method for calculating interest charges as it only charges interest on the initial principal amount without including any interest that has already been charged. This results in the lowest interest charges overall. The other methods, such as APR, add-on interest and effective interest, all include additional fees or interest charges that may end up costing the borrower more in the long run.

Which of the Following Methods of Calculating Interest Results in the Lowest