By definition simple interest is: A) principal times interest rate.
B) future value plus interest.
C) future value minus interest.
D) interest paid on principal only.

D) interest paid on principal only.

Explanation:

When calculating simple interest, consideration is only on the principal amount. Interest earned in one period does not add to the principal amount for the next period. Simple interest is, therefore, the simplest way of calculating interest on deposits and loans.

To calculate simple interest, we apply the formula is the principal amount multiplied by interest rate multiplied by time. Its denoted as

I= p x i x t  

where I = Interest amount

   P =  principal amount

          i = interest rate

   t= time or duration of investments in years.

As per the above formula, simple interest remains a constant amount throughout the investment or loan.

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