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Prompt

How does the saying "money breeds money" apply to simple interest?
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User Shanera
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Final answer:

The saying 'money breeds money' is applicable to simple interest as the initial investment directly affects the amount of interest earned.


Step-by-step explanation:

The saying 'money breeds money' can be applied to simple interest in the sense that the more money you initially invest, the more interest you will earn over time. Simple interest is calculated as a percentage of the principal amount, so the larger the principal, the more interest you will accumulate. For example, if you invest $1,000 with a simple interest rate of 5%, after one year you would earn $50 in interest. However, if you invested $10,000, you would earn $500 in interest in the same time frame.


Learn more about The relationship between money and interest in simple interest calculations.

User Stefaan Colman
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