Question

PLEEEEEEEASE HELP THIS IS MY LAST 10 POINTS PLEASE I BEG

(A) Examine the differences between simple interest and compound interest. (B) Explain how each is calculated. (C) and provide an example of each.

Answer 1

A. Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, and can thus be regarded as "interest on interest."

B. Simple interest=P×i×n

where: P=Principle

i=interest rate

n=term of the loan

Compound interest=[P(1+i)n]−P

Compound interest=P[(1+i)n−1]

where: P=Principle

i=interest rate in percentage terms

n=number of compounding periods for a year