Question

Differnd ce of compound interest and simple interest formula

Answer 1

Compound Interest=P×(1+r)

t

−P

where:

P=Principal amount

r=Annual interest rate

t=Number of years interest is applied

Simple Interest=P×r×n

where:

P=Principal amount

r=Annual interest rate

n=Term of loan, in years

Answer 2

Answer:

Simple interest is calculated on the principal, or original, amount of a loan.

Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, and can thus be regarded as “interest on interest.”

i.e,SI=PTR/100

CI=P(1+8/100)powern