Compound interest is the interest that is divided into different accounts.

Business

1 answer:

drek231 [11]3 years ago

5 0

Answer:

True answer is False.

Compound interest has nothing to with to which account it is credited.

There are two types of interest that can be received on an investment, that is Simple interest and compound interest.

In simple interest, a certain percentage out of the principal amount is calculated in each period. The principal amount stays the same and when the interest is calculated for.for . the next period, interest is not added to the principal.

Compound interest gets "compounded" or added to the principal each period and the new interest in calculated on the new amount (principal + interest added)

Hope this helps! !! Comment if you need to clarify more!

Explanation:

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The following does not describe the matching principle

Marizza181 [45]

Answer: The correct answer is c. Expenses are reported on the income statement when cash is paid.

Explanation: Matching principle states that expenses are matched with the related revenue in the same period, that is, expenses incurred to generate related revenue are recorded during the same time interval the related revenue is recorded in order to show the true and fair position of the profitability of the company.

Based on the above definition, only option C does not align with the matching principle because expenses should be recorded in the income statement when incurred and NOT when cash is paid. If it is recorded when cash is paid, it means cash basis of accounting is being applied.

8 0

3 years ago

James Perkins wants to have a million dollars at retirement, which is 15 years away. He already has $200,000 in an IRA earning 8

Lelu [443]

Solution :

Given :

James needs $ 1,000,000 after 15 years.

His IRA deposit is $ 200,000 and is earning at the rate of 8% per annum.

Maturity value of $200,000 after 15 years = $2000000 \times( 1.08)^{15}$