Wednesday

July 23, 2014

July 23, 2014

Posted by **Anonymous** on Thursday, April 12, 2012 at 8:19pm.

What would be the diffrence in earnings between simple and compound interest on your $100 saving after five years?

MY ANWER: there won't be a diffrence.

I have no idea how to do this I'm just guessing..

- Understanding interest rates -
**Steve**, Friday, April 13, 2012 at 12:48pmNaturally, there must be some difference, or there would be no need for two different terms.

If you invest $1000 at simple interest, say 5%, then every year you collect $50 interest, or 5% of $1000.

A chart of principal and interest for a few years would look like:

1000 50

1000 50

1000 50

. . .

However, with compound interest, when the interest is paid, it becomes part of the principal for the next year. So, its chart would look like

1000.00 50.00

1050.00 52.50

1102.50 55.13

1157.63 57.88

. . .

as you can see, compound interest grows faster than simple interest.

**Related Questions**

Social Studies - I was wondering if I could check my answers with someone. I'm a...

math - how much money would have to be invested in an account at 3.98% annual ...

simple intrest - My daughter brought home a work sheet and I have no clue where ...

6th grade math - Estamate each sum or diffrence by rounding to the greatest ...

computer science - When $1000 is deposit at 5% simple interest, the amount grows...

math compound interest - I can figure all of the other compound interest ...

6th grade math - Estamate each sum or diffrence by rounding to the greatest ...

SS - Rohan has 100 dollars that he wants to save in a bank. Bank A offers two ...

Finance - Find the future value of $10,000 invested now after five years if the ...

Visual Basic 2008 Programming - Help! I'm not sure how to start or how calculate...