Which describes the difference between simple and compound interest?
O Simple interest is paid on small, short-term loans, while compound interest is paid on large, long-term loans.
O Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.
Simple interest is paid on large, long-term loans, while compound interest is paid on small, short-term loans.
O Simple interest is paid on the principal and interest accrued, while compound interest is paid only on the principal.

The differences between simple interest and compound interest are: simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.

What is the Compound Interest?

As is well known, when money is borrowed or deposited in banks, said amount generates additional money for the person who lends it, called "interest," which must be paid in fixed terms.

However, there is something called compound interest, which is based on not requesting the accrued interest for the initial amount of money, but rather that they are maintained and generate interest as well, which would be more effective in case the person or entity wishes to obtain more money.

More information about Compound Interest: https://brainly.com/question/14295570