What's the difference between simple and compound interest?

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asked Sep 24, 2018 34.2k views

2 Answers

Fourier · Answer 1 · 2018-09-26T11:48:32+0000

Simple interest is just calculated on the basis of the principal amount , time period and rate while compound interest is calculated by including the interests of previous periods as well...

Jpmarinier · Answer 2 · 2018-09-28T06:02:25+0000

Simple interest is calculated based on the amount deposited.

Compound interest is calculated based on the amount deposited AND the previous interest (it adds on)

What's the difference between simple and compound interest?

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