Interest and depreciation

• Depreciation is the loss in value of an asset over time due to wear and tear or obsolescence.
• Compound interest refers to the addition of interest earned from previous periods to the principal balance, resulting in higher total payments than simple interest.
• Interest rates are used by banks to calculate the amount of interest charged on loans based on the principal amount borrowed and the length of the loan term.
• The formula for calculating interest on a loan with simple interest is P x r x t = i
• The purpose of calculating interest on loans is to determine how much money will be paid back, including any additional charges such as compounding interest.
• Interest is the cost of borrowing money.
• The formula for calculating compound interest is A = P(1 + r/n)^nt, where A is the accumulated amount, P is the principal, r is the annual rate per period, n is the number of times interest is compounded annually, t is the length of time (in years), and ^ represents exponentiation.
• Simple interest is calculated by multiplying the principal by the annual interest rate and dividing it by the number of times interest is paid per year.
• Principal is the original sum of money invested or borrowed.