Management 202

BUSINESS STATISTICS

FINANCIAL MATHMATICS

Simple and Compound Interest

Simple Interest

Simple interest refers to the price paid for use of borrowed money. Interest may be simple or compound Interest

Simple interest only accrues on the original amount borrowed or invested (This is known as the Principal)

Compound Interest

Interest is paid on the principal plus the re-invested Interest (Compounded) The Period of the time it takes to re-invest is known as the interest/Conversion period this might be Annual, Semi_annual, Quarterly or Monthly

 

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