For the same principal, rate, and time, compound interest is always at least as large as simple interest.

Question

For the same principal, rate, and time, compound interest is always at least as large as simple interest.

Option A — Correct answer

True

Correct choice.

Option B

False

Explanation

Compound interest matches simple interest for one period and exceeds it for longer durations. It is never smaller for the same positive inputs.

Chapter Mock 5: Simple Interest and Compound Interest