BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -When it comes to investing, compound interest is better since it allows funds to grow at a faster rate than they would in an account with a simple interest rate. Compound interest comes into play when you’re calculating the annual percentage yield. That’s the annual rate of return or the annual cost of borrowing money.

Detailed explanation-2: -Bonds and bond funds Bonds are usually seen as a good compounding investment. They are essentially loans one gives to a creditor, whether that’s a company or government entity. That entity or company then agrees to give a specified yield in return for the investor buying the debt.

Detailed explanation-3: -Interest on investments is the periodic receipt of inflows on financial instruments like bonds, government securities, or bank accounts. It may be income earned from the specified form of liquid assets. The pay-out can be monthly, quarterly, or annually.

Detailed explanation-4: -Interest can be calculated in two ways: simple interest or compound interest. Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”