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Simple Interest
Interest charged exclusively on the initial borrowed amount, or on whatever portion of the principal is still outstanding.
Compounded Annually
A method of calculating interest in which the interest earned on an investment is reinvested, and new interest is earned on that interest annually.
Compounding
The financial process where an investment earns interest not only on the principal amount but also on the accumulated interest over time.
Compound Interest
This involves calculating interest on the original sum of money plus the interest that has gathered over preceding intervals, whether for a deposit or a loan.
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