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Simple interest:

Every time interest is paid, it's paid on the amount you originally put in.

Compound interest:

Every time interest is paid, it's paid on the amount you had after the last time interest was paid.

So, part of the interest that's paid today is interest on all the interest that's ever been paid, on

top of the amount you originally put in.

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14y ago

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Q: What is the fundamental difference between simple and compound interests?
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