Q.1.What is savings?
Savings is keeping aside a part of the money you earn for future needs. Savings can be termed as disposable income ( income after taxes) minus spending.
Q.2. What do mean by The Rule of 72 or doubling period?
The Rule of 72 is a simplified way to determine how long a saving will take to double, given a rate of interest.
Q.3. Calculate by using Rule of 72, the rate of return when Rs 500 becomes Rs 1000 in 6 years.
Doubling period= 72/ Interest rate
Or, Interest rate= 72/ Doubling period
Or, Interest rate=72/6
Or, Interest rate= 12%.
Q.4. State the difference between simple interest and compound interest.
Simple interest is the interest paid only on the principal amount borrowed and compound interest is paid on the original principal and on the accumulated past interest.
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