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Is simple interest at 4.25 percent better than compound interest at 4.25 percent?
Simple interest is the interest you earn on your principal, IE the amount of your original investment. For example, you put 1000 dollars in a saving account paying 3% per annum. At the end of the year you will have earned 30 dollars on that one thousand dollars.
If you leave the principal and interest in the account for another year you will earn
another 30.00 on your original 1000 dollars plus .90 interest. on the first 30.00 dollars interest. This gives you a total of 1060.90 in your second year.
In each succeeding year you will earn interest on your interest plus interest on your original principal which, if left alone will add up to a substantial some given the power of compound interest.
One caveat, compound interest is a double edged sword. If you have a loan and fail to make your monthly payments on time, compound interest will gut you financially.
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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
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 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 are some of the uses of compound interest in business?
compound interest increases interest more than simple interest
Is penal interest is simple or compound?
It can be either.
