If I invest $1,000 in a financial instrument paying 10% simple interest payable at the end of each year,I will
A) not receive any interest for the first year.
B) receive the same amount of interest each year.
C) receive interest only for the first year.
D) receive less interest in year ten than in year two.
E) receive interest on both the principal and first year's interest in year two.

Question

Quizplus · Accepted Answer

In simple interest, the interest is calculated only on the principal amount, so you receive the same amount of interest each year.

If I Invest $1,000 in a Financial Instrument Paying 10