If the interest is reinvested and so itself gains interest (in the next interest period) it is compound interest.
compound
The effect of compound interest is that interest is earned on the accrued interest, as well as the principal amount.
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.
Continuous compounding is the process of calculating interest and adding it to existing principal and interest at infinitely short time intervals. When interest is added to the principal, compound interest arise.
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
Compound Interest
compound... yes it is 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.
Compound interest increases the amount earned by adding credited interest to the principal, and interest will then be earned on that money as well. The longer the principal and interest remain in the account, the greater the earnings they will accrue.
compound
compound
The effect of compound interest is that interest is earned on the accrued interest, as well as the principal amount.
Simple interest refers to interest that is only paid on principal. Simple discount refers to the amount that is deducted from the amount of the loan.
both
Compound interest means that the amount of interest earned during a period increases the principal, which is then larger for the next interest period.
Adding the interest to the original deposit accelerates the deposited value.
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