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xoxo_devvie
Explain the difference between a savings account earning simple interest and a savings account earning compound interest.
With earing compound interest i believe u earn more money than u would with just simple interest
Is that right @dumbcow
yes that is true...with simple interest you earn a constant amount of interest each year with compound int you earn a constant rate....the amount increases each year as the balance increases
so then it would be better to open up a compund interest account right?
If u want more money then yes
say you have $100 at 5% interest with simple int you earn $5 per year with compound you earn $5 1st year, then (.05*105) = $5.25 the 2nd year and (.05*110.25) = $5.51 the 3rd year ...
say you have $100 at 5% interest with simple int you earn $5 per year with compound you earn $5 1st year, then (.05*105) = $5.25 the 2nd year and (.05*110.25) = $5.51 the 3rd year ...