High School Business Math and Statistics

Question

How offen is simple interest used the business and banking worlds? a rarely b regularly c frequently d most of the time

Answer 1

Simple interest is most often used because most lenders to consumers are required to quote interest rates according to Regulation Z of the Federal Reserve. The rate may be compounded, but the calculation is still simple interest.

Answer 2

Simple interest is most often used since Regulation Z was introduced by the Federal Reserve in the 1970s. Simple interest may have different compounding periods, but the calculation is still simple interest.

Answer 3

b. Regularly

While compounded interest is a very important concept which is used in many different settings, simple interest is also something that is used on the regular basis