Mathematics for IGCSE & O level - Percentages (Section 1 - No. 14)
Which statements are true about simple and compound interest?
Simple interest is calculated on the original amount.
Compound interest is added to the original investment.
Simple interest always earns more than compound interest over time.
Compound interest yields lower return than simple interest.
Vysvetlenie
Simple interest is based on the principal amount only. Compound interest is interest on interest, and yields a higher return than simple interest.