Interest Flashcards
(6 cards)
1
Q
What is interest?
A
It is the price of borrowing money.
2
Q
What is interest expense?
A
It is when you have to pay the bank extra money after borrowing some.
3
Q
What is interest income?
A
It is when you recieve extra money from the bank after lending them some.
4
Q
What is the formula of finding earned interest?
A
Amount of money invested X interest rate X months % 12
5
Q
If I invested R8000 into the bank for 2 years and the rate was 6%, how much interest would I earn?
A
R8000 x 6% x 2 = R960
6
Q
If I invested R8000 into the bank for 3 months and the rate was 5%, how much interest would I earn?
A
R8000 ✖️ 5% ✖️ 3 ➗ 12 = R100
