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Internals are basically any old assignments. They contribute to your NZQA 'credits', which also contribute to the amount of points you get for university entrance. Internals are marked by teachers, and can range from anything from writing to a entire year's worth of work; e.g, for business studies, I've actually formed a business with a bunch of others, selling power banks/chargers and making about $400... for a 9 credit internal (worth a lot).
Externals however are your 'exams.' You NEED to pass externals in order to pass your course, otherwise you can't take it next year.
Busy atm. Gotta catch up on like 4.