Question

6. What is called the sum of principal and interest?​

Answer 1

Answer:

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. Compound interest is standard in finance and economics.

Compound interest is contrasted with simple interest, where previously accumulated interest is not added to the principal amount of the current period, so there is no compounding. The simple annual interest rate is the interest amount per period, multiplied by the number of periods per year. The simple annual interest rate is also known as the nominal interest rate (not to be confused with the interest rate not adjusted for inflation, which goes by the same name).

Step-by-step explanation:

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Answer 2

Answer:

Amount

Explanation:

• The sum of principal and the interest that we get at the end of the year is known as the amount.
• It is the final money that a person receive.
• The interest, whether simple or compound, gets accumulated on the principal and their total is referred to as Amount.

Therefore, the sum of principal and interest is called Amount.

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