ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the amount of interest
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the base amount in which interest is calculated
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a person who works in a school
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None of the above
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Detailed explanation-1: -The borrowed money which is given for a specific period is called the principal. The extra amount which is paid back to the lender for using the money is called the interest. You calculate the simple interest by multiplying the principal amount by the number of periods and the interest rate.
Detailed explanation-2: -In a principal + interest loan, the principal (original amount borrowed) is divided into equal monthly amounts, and the interest (fee charged for borrowing) is calculated on the outstanding principal balance each month. This means the monthly interest amount declines over time as the outstanding principal declines.
Detailed explanation-3: -If you’d like to calculate a total value for principal and interest that will accrue over a particular period of time, use this slightly more involved simple interest formula: A = P(1 + rt). A = total accrued, P = the principal amount of money (e.g., to be invested), r = interest rate per period, t = number of periods.
Detailed explanation-4: -Principal Amount : Frequently Asked Questions (FAQs) Either you can use a principal amount calculator or the formula for calculating the principal amount; the formula is – P = I/rt, while for determining the interest rate, the expression is – I = P*r*t.