ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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interest rate
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interest
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compound interest
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consumption
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Detailed explanation-1: -To calculate simple interest, the formula used is (P x r x t)/100 where P, r, and t stands for principal amount, rate of interest and tenure of the deposit in years.
Detailed explanation-2: -Annual percentage rate (APR) refers to the yearly interest generated by a sum that’s charged to borrowers or paid to investors. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment.
Detailed explanation-3: -Traditionally, there are two common methods used for calculating interest: (i) the 365/365 method (or Stated Rate Method) which utilizes a 365-day year; and (ii) the 360/365 method (or Bank Method) which utilizes a 360-day year and charges interest for the actual number of days the loan is outstanding.