Interest can be calculated in two ways: simple interest or compound interest. Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the ...

Simple interest is more favorable for borrowers due to its non-compounding nature. Compound interest benefits investors by allowing earnings to also generate returns. Invest in avenues like stocks ...

Note that the example above is exactly the same as the example for simple interest, but the answers are different as compound interest changes the amount each period.

Note that the example above is exactly the same as the example for simple interest, but the answers are different as compound interest changes the amount each period.