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Q: Why compound interest earns more money than simple interest?
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You deposit 750.00 in an account that earns 5 percent simple interest How much interest will your money earn in 6 months?

7.5 x 2.5 ie 18.75


Why do banks pay their customers interest on the money in their accounts?

That money earns interest when the bank loans it out.


How do you figure out your total amount of money after interest?

It depends on whether it is simple or compound interest. The formula for simple interest is A = P(1+rt), where A = amount of money after t years, P = Principal, or the amount of money you started with, and r = the annual interest rate, expressed as a decimal (i.e. 7% = 0.07). For compound interest, the formula is A = P(1+r)t.


What is the term for a type of account that earns interest as money is deposited?

money


What do you get if You deposit 750.00 in an account that earns 5 percent simple interest How much interest will your money earn in 6 months?

Two and a half percent of 750 ie 2.5 x 7.5 which is 18.75


If Mary deposits 275 in principal at an interest rate of 3.2 percent how much interest will she earn in one year?

Before she chooses a bank and deposits her money, Mary should shop around first.There are different kinds of interest.At 3.2% . . .If it's simple interest, her money will earn $ 8.80 .If it's compounded quarterly, it earns $ 8.91 in one year.If it's compounded monthly, it earns $ 8.93 .If it's compounded daily, it earns $ 8.94 .Also, by the way, notice that Mary doesn't earn the interest. Her invested money does.


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


How much money would you have if you put 100 in the bank for a year at 2 percent?

That depends whether the bank is giving you simple interest or compound interset and if it is compound interest is it compounded daily, monthly, quarterly, halfyearly and so on. Assuming it is simple interest, at the end of the year will have 100 + 2 = 102 dollars.


You want to borrow 125 from your dad if he loans you money for 2 months at 6 interest per month how much do you owe him?

Simple interest 140.00, compound interest (where interest is added to the previous months interest) 140.45


How do you find the original investment when given the time and interest?

Not enough information. You also need to know: * The final amount of money * Whether simple or compound interest is known


Sara's grandmother gave her 3000.00 to save for college She put it in a savings account that earns 6 percent per year The money was in the account for 8 years How much simple interest did she earn?

Amount Deposited: $3000 Rate of Interest: 6% No. of Years: 8 Formula for Simple Interest = 3000 * 6 * 8 / 100 The simple interest she will earn in 8 years is $1440


Why does the value of money you save increase over time?

because having it saved earns interest over time