Question

What is the key difference between simple interest in compound interest and how does this different effects the effectiveness of each?

Answer 1

Explanations:

The simple interest is the interest on any amount of money invested or interest on a loan. The interest remains the same with time.

For compound interest, it is based on the principal amount and the interest on any money compounded accumulates on it every period of time. The principal here increases while the interest gets compounded and added to the principal after each period of time.