Learn simple and compound interest
Learn simple and compound interest Interest is defined as the cost of borrowing money as in the case of interest charged on a loan balance. Conversely, interest can also be the rate paid for money on deposit as in the case of a certificate of deposit. Interest can be calculated in two ways, simple interest or compound interest . watch video tutorial Simple interest is calculated on the principal , or original, amount of a loan. Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, and can thus be regarded as “interest on interest.” There can be a big difference in the amount of interest payable on a loan if interest is calculated on a compound rather than simple basis. On the positive side, the magic of compounding can work to your advantage when it comes to your investments and can be a potent factor in wealth...
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