Funding - debts - interest
9 important questions on Funding - debts - interest
In singular interest, the interest is only calculated for the main sum, or original capital.
Interest costs affect the income budget or income statement.
The interest expenditures in a certain year can deviate from the interest costs of that year in terms of amount.
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Once redemption occurs on a loan, interest is recalculated.
When calculating the future value of a certain amount, the interest will be higher each period in case of compound interest than in case of singular interest.
If you will receive an amount in the future, the present value of this will be lower in case of a positive interest percentage.
If one speaks of 1% interest per month, it does not matter whether this is singular or compound interest.
In compound interest, 1% per quarter is the same as 4% per year.
In calculations with interest, it is important that the period during which the money is saved or received concerns the same period as the period the interest percentage pertains to.
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