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What is the difference between return and interest?
Return: The percentage of loss & gain generated by an investment in return. A return is an internal measure to the investor.
Formula: Ending value of investment - Beginning value of investment / Beginning Value of investment x 100
Interest: The cost of borrowing or lending money is interest. Interest is an external measure that relates to the cost of getting money from a lender.
Simple interest formula is given:
SI = (P × R ×T) / 100
where
SI = simple interest
P = principal
R = interest rate (in percentage)
T = time duration (in years)
The compound interest formula is given as:
A = P(1+R/n)nt
Where,
A = amount
P = principal
R = rate of interest
n = number of times interest is compounded per year
t = time (years)
