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You have the option of borrowing money from one source that charges simple interest or from another source that charges the same APR but compounds the interest monthly. Which would you choose, and why?

User Lycha
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14 votes
Answer:

I would choose the source that charges simple interest. This is because simple interest is based only on the principal (The amount borrowed), but compound interest is based on the principal and also the interest that has been generated from it.

User Ian Haggerty
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