Question

What is the difference between simple and compound interest?

Answer 1

Answer:

Simple interest is a quick and easy method of calculating the interest charge on a loan. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

Answer 2

Answer:

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Here's your answer...❤❤

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. Since simple interest is calculated only in the principal amount of a loan or deposit , it's easier to determine than compound interest.

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