Plz answer!! I want to know the differences between simple and compound interest!!?

Answer this question

  • Plz answer!! I want to know the differences between simple and compound interest!!?


Answer #1 | 22/12 2013 22:07
As a formula, simple interest is A = P(1+r)t. A is the amount after a certain amount of time, P is the starting balance, r is the rate of interest (as a decimal) and t is time (usually in years). Compound interest is a bit more complicated. A = P(1+r/n)^nt A, P, r and t are like the simple interest formula, but n is the number of times the interest is compounded in the year. If it is compounded only once a year, n = 1. If quarterly, 4 and if monthly then 12. Hope this helps.
Positive: 62 %
Answer #2 | 22/12 2013 22:26
The answers for formulas are correct. But, if they confuse you, think of it this way. If you borrow a dollar at 10% interest for a year, at the end of the year you would pay $1.00 plus 10 cents interest. $1.10. Same for both simple and compound. If you go two years it looks different. Simple Interest - 10% on the dollar you borrowed each year. So you owe $1.00 plus 10% plus 10% for the second year. $1.20 Compound interest - Now you pay 10% on the amount due on each year. The second year would be 10% interest on the $1.10 due from first year. So $1.10 + 11 cents for the more interest. The third year would be 10% on $1.21. and on. So the amount you owe gets bigger much faster. Or course, if you are paid compound interest then that gets bigger faster, too. Hope that helps.
Positive: 56 %
Answer #3 | 23/12 2013 02:48
Simple interest is only on the principle amount but the Compound interest is on Principle amount as well as on the interest applied as well. C.I. is >=P.I
Positive: 36 %

Possible answer

PLZ ANSWER!!!!! subtract. 6/7 ... get answers with explanations ... Join now 1. Log in Join now Katie; a few seconds ago; Hi there!
Read more
Positive: 62 %
Read our interest rates guide and learn ... Rough compound interest calculation rule of thumb ... as you only want to know the interest rate during the ...
Read more
Positive: 57 %
Answers to Questions from People Who Know at Ask Experience Project. Find the Answer to your Question. ... 5 Simple Benefits Of Considering Diet Supplements.
Read more
Positive: 43 %
What's the difference between like, ... and got a huge variety of answers: ... I'd want to die too.” How do you know?
Read more
Positive: 20 %

Show more results

Login to your account
Create new account