Question

what is the difference between compound interest and simple interest​

Answer 1

Step-by-step explanation:

The interest, typically expressed as a percentage, can be either simple or compounded.

Simple interest is based on the principal amount of a loan or deposit, while compound interest is based on the principal amount and the interest that accumulates on it in every period.

Answer 2

The value can be either basic or weighted, usually measured as a percentage. Further explanation is given below.

Step-by-step explanation:

• Simple Interest: Simple interest is determined by the amount of the principal loan or deposits.

The formula for finding the Simple interest:

⇒      SI= P×i×n

Where P= Principal

            i= Interest rate

           n= Term of loan

• Compound Interest: The compound interest shall be focused on the amount of principal and the interest accrued thereon in each cycle.

The formula for finding the Compound interest:

⇒      CI= P[(1+i)n −1]

Where P= Principal

             i= Interest rate

            n= No. of the period of compounding

Learn more:

Difference between simple interest and compound interest shortcut formula for n years ...

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