Interest Flashcards
1
Q
Simple interest
A
Interest that is paid only on original principle or on the amount originally borrowed
Principal amount + interest.
2
Q
Compound interest
A
Interest paid on the principle and the previously earned interest
The more often your money is compounded the more interest your money earns
3
Q
Ways to compound interest
A
Annually-every year Semi annually-every 6 months Quarterly-every 3 months Monthly-every month Daily
4
Q
Usage of simple interest
A
Savings account
5
Q
Principle
A
The amount of debt(credit) or investment(saving)
The face value of a stock or bond
Starting amount
6
Q
Interest
A
Principle x rate x time
