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xoxo_devvie

  • one year ago

Explain the difference between a savings account earning simple interest and a savings account earning compound interest.

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  1. xoxo_devvie
    • one year ago
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    @dumbcow @kropot72

  2. dmezzullo
    • one year ago
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    With earing compound interest i believe u earn more money than u would with just simple interest

  3. dmezzullo
    • one year ago
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    Is that right @dumbcow

  4. dumbcow
    • one year ago
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    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

  5. xoxo_devvie
    • one year ago
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    so then it would be better to open up a compund interest account right?

  6. dmezzullo
    • one year ago
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    If u want more money then yes

  7. dumbcow
    • one year ago
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    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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