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Can compound interest be described as interest earned on principle along with accumulated interest?
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∙ 13y ago
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Wiki User
∙ 13y ago
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How is interest different from compound interest?
Simple interest is interest paid on the original principle only, Compound interest is the interest earned not only on the original principal, but also on all interests earned previously.
What is the formula for a simple compound interest rate?
Simple Interest = p * i * n p is principle and i is interest rate per period and n is the number of periods. A = P(1 + r)n is for compound 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.
How can you compare simple and compound interest?
Simple interest is calculated one time @ a specified rate over a specific length of time. Compound interest is calculated multiple times @ a specified rated divided by the number of given periods within a specified time. example: $100 @ 10% interest over 1 year. Simple interest: principle x rate x time = interest; $100 x .10 x 1 = $10 example: $100 @ 10% interest compounded quarterly over 1 year. Compound interest: principle x {(1 + rate / #periods)n} = interest $100 x {(1 + .10 / 4 )^4} = $100 x (1 .025 )^4 = $100 x 1.1038 = $10.38
WHAT does the carrot in the formula for compound interest means?
There is no carrot in the compound interest formula!
When accumulated interest is added to the initial principle?
Compound Interest (study island)
Interest calculated not only on the original principle but also on the interest already accumulated is called?
The answer is compound interest
How is accumulated interest calculated?
Accumulated or compound interest is calculated by adding interest to both the principal and any interest accumulated up to the point of the calculation.
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.
What kind of interest is paid on the deposit plus accumulated interest from period to period?
A Compound interest !
What interest is calculated on both the amount borrowed and any previous interest?
Compound interest, but only if the previous interest is accumulated.
Type of interest is calculated by adding the interest earned to the principle?
Compound interest
What is simple interest?
Simple interest does not compound. In other words, If you start off with $500 and get $5 in interest, the $5 you got in interest will not be included when calculating the amount of interest you will get next year. Simple interest can be calculated by the formula i = prt, where i is the amount of money earned from the interest, p is the principle (starting money), r is the rate (as a decimal,) and t is the time in years. Another formula is used to calculated the accumulated amount: A = p(rt + 1), where A is the accumulated amount.
How is interest different from compound interest?
Simple interest is interest paid on the original principle only, Compound interest is the interest earned not only on the original principal, but also on all interests earned previously.
What is the formula for a simple compound interest rate?
Simple Interest = p * i * n p is principle and i is interest rate per period and n is the number of periods. A = P(1 + r)n is for compound interest.
How is simple interested calculated differently from coupounded interest?
With compound interest the interest amount is added to the principle and then earns interest as well. This is usually expressed as an annual percentage rate (APR). Simple interest is not added to the principle and does not earn further interest and is used rarely.
Difference between simple and compound interest?
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.
