Question

In your OWN words, explain broadly:
1- If you're an investor, will u want ur loans to be repaid at a simple interest or composed?
2- If you're a credit interester, will u want your loans to be repaid at a simple interest or composed?

Answer 1

Answer:

1. Simple interest.

2. Compound interest.

Explanation:

Simple interest, as it sounds, is the simplest and the easiest for determining how much extra you'll have to pay for your loan. You'll have to know how to calculate simple interest even if you take out a compound interest loan, because the simple interest is the basis on which the compound interest is calculated.

Remember, interest is essentially the price you pay for borrowing money, on top of paying back that money itself (called the "principal").

Answer 2

Hey Mate !

1.Simple Interest essentially amounts to the cost of borrowing the money—what you pay the lender for providing the loan—and it's typically expressed as a percentage of the loan amount. ... Because you're paying interest on a smaller amount of money (just the principal), simple interest can be advantageous when you borrow money.

2.Most mortgages are also simple interest loans, although they can certainly feel like compound interest. In fact, all mortgages are simple interest except those that allow negative amortization. An important thing to pay attention to is how the interest accrues on the mortgage: either daily or monthly.

Hope it helps u !