How Does The Saying "Money Breeds Money" Apply To Simple Interest?
Answers
The saying money breeds money means that with money, you have the possibility to create more money. Simple interest is the idea that you have something, and you obtain a percentage of that every designated time period. That being said, simple interest = money breeds money.
For example, say you have $100.
You lend that money and charge 25% interest per year.
At the end of the year, you are owed $125.
At the end of the next year, you are owed $150.
At the end of the year after that, you are owed $175, and so on and so on.
Say the person decides to finally pay you back after 5 years. You would have turned that $100 into $225, more than doubling your money with zero effort.
Therefore, money breeds money.
Simple interest really begins to relate to the saying when more money and higher rates are on the line. Imagine if it was $100,000 or $100,000,000. You would have seen insane profit, doubling your net worth!
It applies because interest slowly increases the amount of money gained.
It applies because interest slowly increases the amount of money gained. IF you have any Tolkien related questions, feel free to ask me
The simple interest is calculated as the principle amount times the rate of interest times the number of years.
So, if our principle amount is $100 and rate is 5% and time is 1 year, then at the end of the year we will yield an interest of :
Hence, we will earn $5 over our initial amount of $100 making it $105 by the end of one year. Then next year again, we will get, 
making it 
by second year end and this chain continues.
In this way we can see that each year the initial amount is increasing with simple interest. So, this validates the sentence 'money breeds money' .
Explained
Step-by-step explanation:
That saying money breeds money means that with money in hand we can create more money with help of various tools and one of these toots is Simple interest.
Simple interest is gaining some extra over the money we already have at the same time keeping our principle amount safe.
For example you have $100 and you lend the money at 20% per year.
after 1 year you will have $20 as interest on $100, next year you again get $20 as interest. Similarly, after 5 years you will $100 as interest. Therefore you double your income in 5 years without much effort. Hence we can say that money breeds money applies to simple interest.
The saying money breeds money means that with money, you have the possibility to create more money. Simple interest is the idea that you have something, and you obtain a percentage of that every designated time period. That being said, simple interest = money breeds money.
For example, say you have $100.
You lend that money and charge 25% interest per year.
At the end of the year, you are owed $125.
At the end of the next year, you are owed $150.
At the end of the year after that, you are owed $175, and so on and so on.
Say the person decides to finally pay you back after 5 years. You would have turned that $100 into $225, more than doubling your money with zero effort.
Therefore, money breeds money.
Simple interest really begins to relate to the saying when more money and higher rates are on the line. Imagine if it was $100,000 or $100,000,000. You would have seen insane profit, doubling your net worth!
How Does The Saying "Money Breeds Money" Apply To Simple Interest?
Source: https://answer-helpers.com/mathematics/question11536272
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