Tag: compound interest

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What are advantages and disadvantages of Simple Interest and Compound Interest with examples

Advantages and Disadvantages of Simple Interest and Compound Interest Both simple interest and compound interest have their unique advantages and disadvantages. Below is a detailed explanation, including examples. Simple Interest Advantages: Easy to Calculate and Understand: Simple interest is straightforward to calculate using the formula: Simple Interest=(P×R×T)/100 where P is the principal amount, R is the […]

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Compound interest – Meaning, Formula and Solved Examples

Compound interest – Meaning, Formula and Solved Examples Compound interest is a way of calculating interest where the interest earned over time is added back to the principal, so that the interest in the next period is calculated on the new total (which includes the previously earned interest). This means we earn interest on the […]

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What is Simple and Compound Interest Definition, Formula and Examples

What is Simple and Compound Interest Simple Interest Definition: Simple interest is the interest calculated on the original principal amount for a specific period at a fixed rate of interest. Formula: Simple Interest (SI) = (P × R × T)/100​ Where: P = Principal amount (the initial amount of money) R = Rate of interest per annum […]

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