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What interest applies when interest for each year is based on the amount of the loan or investment?
When each interest calculation uses the initial amount, this is called Simple Interest. The other type is Compound Interest, which uses the current balance as the basis for interest calculation.
What is the difference between simple interest and compound interest is one better than the other why or why not?
With compound interest, after the first period you interest is calculated, not only on the original amount but also on the amount of interest from earlier periods. As to "better" or not, the answer depends on whether you are earning it on savings or paying it on borrowing!
How does one calculate times interest earned?
A times interest earned is calculated to determine how well a business could pay off its debts. It is calculated by taking the company's earnings before taxes and interest and dividing it by the interest on bonds payable and other debt.
What is simple interest?
Simple interest does not compound. In other words, If you start off with $500 and get $5 in interest, the $5 you got in interest will not be included when calculating the amount of interest you will get next year. Simple interest can be calculated by the formula i = prt, where i is the amount of money earned from the interest, p is the principle (starting money), r is the rate (as a decimal,) and t is the time in years. Another formula is used to calculated the accumulated amount: A = p(rt + 1), where A is the accumulated amount.
Jonathan invested a total of 10000 in 2 certificates of deposit 1 pays 5 percent interest and the other pays 6 percent interest his total interest at the end of 1 year is 560 how much is invested in t?
4000
