is compound interest and diminishing balance the same?

Answer 1

No. Compound interest can be applied either to a deposit or a loan. The word diminishing balance is used only in connection with your loan, where the payments made are credited and the loan amount keeps diminishing for purposes of calculation of interest.

Compound interest simply means the interest accrued upto a period ( a month, quarter, half year or an year) is added (compounded) to the principal and the new principal is used for calculating the interest.