BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Interest based on flat rate
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Interest based on reducing balance
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Interest based on unpaid balance
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Compound interest
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Detailed explanation-1: -What Is Accrued Interest? In accounting, accrued interest refers to the amount of interest that has been incurred, as of a specific date, on a loan or other financial obligation but has not yet been paid out.
Detailed explanation-2: -Unpaid interest is often interest that accrues during times when payments are postponed, (e.g., grace periods, forbearances, or deferments). Capitalization of interest can occur at the time a loan enters repayment for the first time or after a temporary suspension of payments.
Detailed explanation-3: -Accrued interest is unpaid interest related to credit cards, loans, investments, savings and beyond. When it comes to personal finance, accrued interest can be owed or earned. Accrued interest on a loan or credit card adds to how much a borrower owes. Accrued interest on a savings account or an investment earns income.
Detailed explanation-4: -Unpaid Balance Method – the finance charge is based on a portion of the previous balance you have not yet paid. Unpaid Balance = Previous Balance – (Payments and Credits)