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For a single period there is no difference between the two. However, in the case of longer periods, simple interest is calculated on the capital borrowed (or lent). For periods after the first, compound interest is calculated not only on the capital but also on the interest accrued during previous years.
For example, if 200 is borrowed at 5% for 3 years, then with simple interest, it will be
200*(1+0.05*3) = 230. The compounded value is 200*(1.05)^3 = 231.53
[Note 0.05 and 1.05 are used because 5% = 0.05 and a number increased by 5% is equivalent to multiplying it by 1.05.]
What else can I help you with?
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 the difference between a compound inequality using the word and and compound inequality using the word or?
The difference between them is that when solving an "and" inequality you are comparing two inequalities and when you are solving an "or" inequality you dont compare, you only use one inequality example of "and" . 2<x+3<7 example of "or" . 4<d or m<1
Which statement describes a chemical property that can be used to distinguish between compound A compound B?
One chemical property that can be used to distinguish between two compounds is their reactivity with a specific reagent to form a unique product. For example, if compound A reacts with a specific metal to form a colored precipitate while compound B does not, this difference in reactivity can be used to distinguish between the two compounds.
How can you tell the difference between a compound an a element?
in the symbol, a compound usually has 2 or more capital letters to let you know that there is more than one substance for example H2O is a compound because h is hydrogen and o is oxygen
Is ICI covalent or ionic?
This completely depends on the compound it is forming. If the compound is NaCl for example, this is an example of ionic bonding (the difference between the larger electronegativity and higher electronegativity is above 1.9). If it's somthing like FCl for example, the bond is covalent (the difference between the larger electronegativity and higher electronegativity is below 1.9).
What is the difference between has and have and give an example?
the difference between has and have is that you use has in sentences with : ( she , he and it ) for example : she has a book . but you use have in sentences with : ( I , you , we and they ) for example : you have a book , I have a book .
How compound interest is used in real life?
Compound interest is commonly used in financial investments, such as savings accounts, stocks, and bonds. By reinvesting the interest earned, your money grows exponentially over time. For example, retirement accounts benefit greatly from compound interest, as the money you contribute grows over the years through compounding.
What is the interest earned on 600000?
Not enough information. The interest earned depends on the capital (which is the only datum provided), on the interest rate, on the time (for example, how long you leave interest in your bank), and on whether simple or compound interest was agreed.
What is the difference between yield and coupon rate?
The difference between the coupon rate and the required return of a bond is dependent upon the type of bond. Junk bonds will have the biggest difference between its return and the coupon rate.
What is Completions an example of?
the relationship between the words in a compound word.
Difference between eg and ie?
example given......in example
Is calcium fluoride an example of a covalent compound?
Calcium fluoride is an example of an ionic compound, not a covalent compound. Covalent compounds form between two nonmetals, while ionic compounds form between a metal and a nonmetal.
