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Simple interest is based on the original principle of a loan. Simple interest is generally used on short-term loans. Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on.

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9y ago
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11y ago

simple interes: on principal only; compound interest: on both principal and interest.

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Q: Difference between simple and compound interest?
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What is the formula for difference between simple interest and compound interest?

P(r/100)^2


The difference between the simple and compound interest on a certain sum is Rs250 for two years at 5 percent Pa per annum Find the sum?

simple interst is when you earn interest from your principal but compound interest is when you earn interest from your principal as well as from your previous interest


What is the calculation for a simple compound interest rate?

There is simple interest and there is compound interest but this question is the first that I have heard of a simple compound interest.


What if the lender has charged more interest than loan allows what can you do?

Visit the lender and verify that this is actually happening. There is a difference between simple interest and compound interest based on the interest and the principle outstanding.


How simple interest and compound interest affect investment exercises?

Compound interest gives you more, but at a low interest rate (less than 10%), the difference is negligible.


What is the difference between Simple interest and compound interest for two years on a certain sum of money at 4 percent is Rs160 the sum is?

Simple: 160 + (1.6 x 4 x 2) = 172.80 Compound: 160 x (1.04)2 = 173.06


What is the difference between simple interest and compound interest is one better than the other why or why not?

With compound interest, after the first period you interest is calculated, not only on the original amount but also on the amount of interest from earlier periods. As to "better" or not, the answer depends on whether you are earning it on savings or paying it on borrowing!


What is the difference between a simple interest and compound interest?

Simple interest is obtained where you take the interest every year/set period as opposed to compund interest where interest is calculated on the previous answer.For Example: Adding 10% Interest, Starting With 100.Simple: 100, 110, 120, 130...Compund: 100, 110, 121, 133.1...


What is a simple interest in math?

Simple interest is interest that is calculated only on the amount of unpaid principal on a loan. Such interest is not added to the value of the loan but is tracked separately. Compound interest is interest that is calculated on the total of unpaid principal and accumulated interest on a loan. The difference is in simple interest there is no interest charged on accumulated interest while in compound interest there is interest charged on accumulated interest.


Is the annual interest rate the same as simple interest?

Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.


What is the difference between simple and compound gear train?

simple move slower


How long does it take to get 40.00 on 8 percent interest with 2.00?

That depends on how the interest works.Is it simple interest ? Is it compound interest ?If compound, then how often is it compounded ?8% simple interest turns $2 into $40 in 237.5 years .8% compound interest, compounded quarterly, does the job in 37.8 years .As you can see, it makes quite a difference.