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Finance / July 19, 2018 / Isabella Mccray

In the real world, simple interest is rarely used. When you deposit money into an interest-bearing account, or take out a line of credit, the interest that accumulates is added to the principal, and the next interest calculation is done on both the principal and the interest.

A current liability is an obligation that must be repaid within the current period or the next year whatever is longer. In other words, it’s a short-term loan or long-term debt that will become due in the next 12 months and require payment of current assets.

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