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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.
What makes the simple interest simple?
It is interest on simply the original capital. After the first period, compound interest involves interest on the interest earned in previous periods and soit not simple.
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
This type of interest is calculated by adding the interest earned to the principal.?
compound
What is the simple interest of a loan for 1ooo with 5 percent interest after 3 years?
Simple interest = 1000 * 5/100 * 3 = 150
