anonymous
  • anonymous
Explain the difference between a savings account earning simple interest and a savings account earning compound interest.
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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katieb
  • katieb
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anonymous
  • anonymous
@dumbcow @kropot72
dmezzullo
  • dmezzullo
With earing compound interest i believe u earn more money than u would with just simple interest
dmezzullo
  • dmezzullo
Is that right @dumbcow

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dumbcow
  • 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
anonymous
  • anonymous
so then it would be better to open up a compund interest account right?
dmezzullo
  • dmezzullo
If u want more money then yes
dumbcow
  • dumbcow
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 ...
kobi
  • kobi
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 ...

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