Questions: Determine whether the following statement is true or false. If the statement is false, make the necessary change(s) to produce a true statement. In simple interest, only the original money invested or borrowed generates interest over time. Choose the correct answer below. A. The statement is false. The true statement is "In simple interest, the original money invested or borrowed and any accumulated interest generates interest over time" B. The statement is false. The true statement is "In simple interest, the original money invested or borrowed and any accumulated interest does not generate simple interest over time: C. The statement is true because simple interest is interest computed on the original principal as well as on any accumulated interest. D. The statement is true because simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money.

Determine whether the following statement is true or false. If the statement is false, make the necessary change(s) to produce a true statement.
In simple interest, only the original money invested or borrowed generates interest over time.

Choose the correct answer below.
A. The statement is false. The true statement is "In simple interest, the original money invested or borrowed and any accumulated interest generates interest over time"
B. The statement is false. The true statement is "In simple interest, the original money invested or borrowed and any accumulated interest does not generate simple interest over time:

C. The statement is true because simple interest is interest computed on the original principal as well as on any accumulated interest.
D. The statement is true because simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money.

Transcript text: Determine whether the following statement is true or false. If the statement is false, make the necessary change(s) to produce a true statement. In simple interest, only the original money invested or borrowed generates interest over time. Choose the correct answer below. A. The statement is false. The true statement is "In simple interest, the original money invested or borrowed and any accumulated interest generates interest over time" B. The statement is false. The true statement is "In simple interest, the original money invested or borrowed and any accumulated interest does not generate simple interest over time: C. The statement is true because simple interest is interest computed on the original principal as well as on any accumulated interest. D. The statement is true because simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money.

Solution

Solution Steps

Step 1: Understanding Simple Interest

Simple interest is a method of calculating interest where the interest is computed only on the original principal amount. It does not take into account any interest that has been accumulated over time. The formula for simple interest is:

\[ I = P \cdot r \cdot t \]

where:

\(I\) is the interest,
\(P\) is the principal amount,
\(r\) is the annual interest rate,
\(t\) is the time in years.

Step 2: Analyzing the Statement

The statement claims that "In simple interest, only the original money invested or borrowed generates interest over time." This is consistent with the definition of simple interest, where interest is calculated solely on the principal amount and not on any accumulated interest.

Step 3: Evaluating the Options

Option A: This option suggests that both the original money and any accumulated interest generate interest over time. This is incorrect because simple interest does not consider accumulated interest.
Option B: This option suggests that neither the original money nor any accumulated interest generates simple interest over time. This is incorrect because simple interest is indeed generated on the original principal.
Option C: This option claims that simple interest is computed on the original principal as well as on any accumulated interest. This is incorrect because simple interest is only computed on the original principal.
Option D: This option correctly states that simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money, and it is computed only on the original principal.

Final Answer

The statement is true because simple interest is the amount of money that we get paid for lending or investing money, or that we pay for borrowing money, and it is computed only on the original principal. Therefore, the correct answer is:

\[ \boxed{\text{D}} \]

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