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4 Cards in this Set
- Front
- Back
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Simple Interest |
Simple Interest (S.I) is the method of calculating the interest amount for some principal amount of money. |
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Compound Interest |
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. |
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Compounded half yearly |
If the rate of interest is annual and the interest is compounded half-yearly (i.e., 6 months or, 2 times in a year) then the number of years (n) is doubled (i.e., made 2n) and the rate of annual interest (r) is halved (i.e., made r/2). |
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Compounded quarterly |
If the rate of interest is annual and the interest is compounded quarterly (i.e., 3 months or, 4 times in a year) then the number of years (n) is four times (i.e., made 4n) and the rate of annual interest (r) is quartered (i.e., made r/4). |
