BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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simple interest
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compound interest
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complex interest
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profit
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Detailed explanation-1: -Compound interest is the interest calculated on the principal and the interest accumulated over the previous period. It is different from simple interest, where interest is not added to the principal while calculating the interest during the next period.
Detailed explanation-2: -Compound interest is the interest you earn on interest. In short, you make an initial investment and receive a particular rate of return your first year which then multiplies year over year depending on the interest rate received.
Detailed explanation-3: -In simple terms, compound interest is interest you earn on interest. With a savings account that earns compound interest, you earn interest on the initial principal plus on the interest that accumulates over time.