ECONOMICS (CBSE/UGC NET)

ECONOMICS

SAVING AND INVESTING

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Money earned on the original principal and on previously earned interest is referred to as
 A present value B simple interest C compound interest D future value
Explanation:

Detailed explanation-1: -Compound interest is the interest on a deposit calculated based on both the initial principal and the accumulated interest from previous periods. 1. Or, more simply put, compound interest is interest you earn on interest . You can compound interest on different frequency schedules such as daily, monthly or annually.

Detailed explanation-2: -Compound interest, also called “compounding interest, ” is the interest on the initial investment as well as the accrued interest on that investment.

Detailed explanation-3: -Compound interest is interest calculated on both the principal amount and any previously-earned interest. Compound interest is different from simple interest, which is only applied to the principal amount. Interest may be compounded daily, monthly, quarterly or annually.

Detailed explanation-4: -Compound interest is interest calculated on an account’s principal plus any accumulated interest. If you were to deposit \$1, 000 into an account with a 2% annual interest rate, you would earn \$20 (\$1, 000 x . 02) in interest the first year.

Detailed explanation-5: -What Is Compound Interest? Compound interest is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods.

There is 1 question to complete.