Interest Flashcards
1
Q
Simple interest
A
Interest that is paid only on the original principle or on the amount originally borrowed.
If you put $100 dollars in savings and there is a rate of 6% simple interest at the end of one year you will have $106.
2
Q
Compound Interest
A
Interest paid on the principle and the previously earned interest.
Interest can be compounded several ways Annually every year Semiannually every six months Quaterly every three months Monthly Daily
The more often your money is compounded the more interest your money earns.
3
Q
Principle
A
What you start out with.
The amount of debt or investment.
The face value of a stock or bond.
