BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Two main types of interest can be applied to loans-simple and compound. Simple interest is a set rate on the principal originally lent to the borrower that the borrower has to pay for the ability to use the money. Compound interest is interest on both the principal and the compounding interest paid on that loan.

Detailed explanation-2: -Simple and compound interest Simple interest is a set rate on the principal amount lent to the borrower. Compound interest refers to the interest on the principal amount and the compounding interest paid. Whether or not an interest rate is simple or compound depends on the type of interest rate.

Detailed explanation-3: -What Is Simple Interest? Simple interest is an interest charge that borrowers pay lenders for a loan. It is calculated using the principal only and does not include compounding interest.

Detailed explanation-4: -What are the Different Types of Interest? The three types of interest include simple (regular) interest, accrued interest, and compounding interest. When money is borrowed, usually through the means of a loan, the borrower is required to pay the interest agreed upon by the two parties.