BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What do you call the amount earned or paid with the use of money?
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Interest
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Principal
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Term
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Rate
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Explanation:
Detailed explanation-1: -Interest income is the amount paid to an entity for lending its money or letting another entity use its funds. On a larger scale, interest income is the amount earned by an investor’s money that he places in an investment or project.
Detailed explanation-2: -Interest is money paid or earned for the use of money. The principal is the amount of money borrowed or deposited.
Detailed explanation-3: -Compound Interest Compounding interest essentially means “interest on interest.” The interest payments change each period instead of staying fixed. Simple interest is based solely on the principal outstanding, whereas compound interest uses the principal and the previously earned interest.
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