Simple Interest and Compound Interest

Question 1

It is a certain amount charged to the borrower and is usually present in loans, credit cards, investments, and bank accounts

Answer 1

Interest

Question 2

What are the 2 types of interest?

Answer 2

Simple Interest & Compound Interest

Question 3

This type of interest is charged only on loan/invested amount called the Principal

Answer 3

Simple Interest

Question 4

Is wherein the interest due at the end of a certain period is added to the principal and that sum earns interest for the next period

Answer 4

Compound Interest

Question 5

In I = Prt, what do these letters stand for?

Answer 5

I- Interest
P- Principal
r- rate of interest
t- time in years

Question 6

In (A = P + I) or (A = P (1 + rt)

Answer 6

A- Future Value/Maturity Value
P- Principal
r- rate of interest
I- Interest
t- time in years

Question 7

This is the present value and the amount borrowed or invested

Answer 7

Principal

Question 8

This is also known as the maturity value as well as it is the total amount at the end of the term WITH INTEREST

Answer 8

Future Value

Question 9

Which kind of calendar does ordinary interest possess?

Answer 9

360-day calendar

Question 10

Which kind of calendar does exact interest possess?

Answer 10

365-day calendar

Question 11

In the Compound Interest formula, what do these values stand for?

A= P (1+rt)

Answer 11

A- Maturity Value
P- Principal
n- number of compounding periods in a year
r- rate of interest
t- time in years