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Compound Interest
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∙ 13y ago
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Would the statement 'Simple Interest is interest earned on interest' be True or False?
False. Interest upon interest is compounded interest
What is the value of compound interest?
Compound interest increases the amount earned by adding credited interest to the principal, and interest will then be earned on that money as well. The longer the principal and interest remain in the account, the greater the earnings they will accrue.
What is the interest earned on 600000?
Not enough information. The interest earned depends on the capital (which is the only datum provided), on the interest rate, on the time (for example, how long you leave interest in your bank), and on whether simple or compound interest was agreed.
Why does compound interest earn more than simple interest?
With compound interest, in the second and subsequent periods, you are earning interest on the interest earned in previous periods. If you withdraw the interest earned at the end of every period, the two schemes will earn the same amount.
What is the process of earning interest on interest that you've already earned?
compounding
What is the formula for times interest earned ratio?
Times Interest Earned = Operating Income/ Interest Expense.
Compound interest is interest paid on interest previously earned?
yes
How is interest different from compound interest?
Simple interest is interest paid on the original principle only, Compound interest is the interest earned not only on the original principal, but also on all interests earned previously.
Would the statement 'Simple Interest is interest earned on interest' be True or False?
False. Interest upon interest is compounded interest
Type of interest is calculated by adding the interest earned to the principle?
Compound interest
Can compound interest be described as interest earned on principle along with accumulated interest?
true
A company's fixed interest expense is 8000 its income before interest expense and income taxes is 32000 Its net income is 9600 The company's times interest earned ratio is?
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
What is the value of compound interest?
Compound interest increases the amount earned by adding credited interest to the principal, and interest will then be earned on that money as well. The longer the principal and interest remain in the account, the greater the earnings they will accrue.
Is interest income reportable?
Earned interest is reported as income.
What is the interest earned on 600000?
Not enough information. The interest earned depends on the capital (which is the only datum provided), on the interest rate, on the time (for example, how long you leave interest in your bank), and on whether simple or compound interest was agreed.
Why does compound interest earn more than simple interest?
With compound interest, in the second and subsequent periods, you are earning interest on the interest earned in previous periods. If you withdraw the interest earned at the end of every period, the two schemes will earn the same amount.
Does sinking fund makes money grow by adding interest to previous interest earned?
A sinking fund makes money grow over time by adding interest to previous interest earned. ... The rate of return matters when it comes to compound interest.
