Nobody downloaded yet

Simple and Compound Interest - Essay Example

Comments (0) Cite this document
Summary
This paper “Simple and Compound Interest” looks at the differences between the two basic interest types: Simple Interest and Compound Interest. The difference between interest and profit is that profit is yield as a result of investment (to an owner) while interest is paid to a lender…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.1% of users find it useful
Simple and Compound Interest
Read TextPreview

Extract of sample "Simple and Compound Interest"

Download file to see previous pages Simple interest is interest expressed as a percentage of principal or the original amount borrowed or lent, for the entire period of borrowing. The interest will be the income received with regard to the lending or the price paid for the utilization of borrowed amount.  Simple interest happens to be the fastest as well as easiest approach of computing the interest on amount borrowed or lend. A car loan is a very popular example of simple interest, with which interest is charged only on the principal or original amount borrowed or lent. Below is the formula utilized in calculating interest owed in simple interest: Compound interest is interest expressed as a percentage of the revised principle.  In other words, compound interest may be referred to as interest added to the principal amount of a loan or deposit in order for the interest added to also earn interest onwards. In this approach, interest earned within the prior periods is added to the initial amount/principal: this increases the amount, on which the next period’s interest will be charged. The summing up of the principal amount and the interest is referred to as compounding. In this case, interest has to be paid on principal amount as well as interest accumulated during the deposit or loan term. It happens to be normal for banks to pay interest on semi -annually basis. Financial institutions, on the other hand, have a guiding principle of paying interest on quarterly basis. It is important to understand to how to calculate compound interest. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Simple and Compound Interest Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Simple and Compound Interest Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/business/1702417-simple-and-compound-interest
(Simple and Compound Interest Essay Example | Topics and Well Written Essays - 1000 Words)
Simple and Compound Interest Essay Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1702417-simple-and-compound-interest.
“Simple and Compound Interest Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1702417-simple-and-compound-interest.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Simple and Compound Interest

Compound helicopter

...of the advancing blade, and an upward nose pitch.25 The compound helicopter seeks to solve the problems brought about by the structural mechanism of the simple helicopter by postponing the commencement of advancing blade compressibility or retreating blade stall. This is done by having the auxiliary propulsion mechanism take over the function of thrusting the helicopter forward and reducing the power supplied to the rotor resulting in slowing down the blade rotation.26 4.0 Configuration A compound helicopter, as earlier discussed, is a modified version of a conventional helicopter. Lockheed’s XH-51A Compound, for example, was built on the original XH-51A conventional...
12 Pages(3000 words)Literature review

Mixture and compound

...? Compounds and Mixtures, Ionic and Covalent Bonds College: Compounds and Mixtures, Ionic and Covalent Bonds A mixture is a substance that is composed of two or more elements mixed physically but not chemically bonded (Patten, 1995). Simple physical means such as filtering, use of a magnet or picking if the elements have big grains can separate mixtures (Phillips, 1998). A compound on the other hand, is a pure substance made of two or more chemically combined elements. Compounds are separable by chemical means such as electrolysis, oxidation and reduction (Phillips, 1998). A mixture and a compound also vary on the composition of the...
3 Pages(750 words)Essay

Financial Investment

...and learning its techniques are the most important concepts for the study and application of finance in general. The concept of interest is divided between simple and compound interest. Simple interest is calculated only by taking into consideration the beginning principal. For instance, if an individual invested $1,000 dollars in a savings account at 5% annual interest, the expected return after one year would amount to a $50 gain on investment. The concept of compound interest unlike simple interest which only takes into consideration the...
5 Pages(1250 words)Research Paper

Compound Interest and the Power of Saving

...financially benefit anyone who understands it. To understand this concept an old parlor trick question can help. That question is, what would you prefer $1000 everyday for a month or a penny doubled everyday for the month (i.e. 1 cent the first day 2 cents the second day 4 cents the third day etc.). The mathematically astute person knows that this is a no contest and the person taking the penny doubling offer wins by a huge margin. The compound interest can be explained like this .Simple interest as we already know is the interest that is derived from only the investment in a principal amount. Say we take $100 and put it in an investment for one year at...
6 Pages(1500 words)Essay

Simple Problem

...Simple Problem Product Specification The problem to be dealt with is that Fluffy, the white fluffy cat, has been hanging out and dirty now and we arerequired to give it a bath so as to make it fluffy or white and help it sleep on the pillow. This is the essential objective. Various equipments are needed to give fluffy a bath and they include water, a bathtub, towel, special shampoo for pets, cat bath seat, dryer, comb, fragranced powder, and an appropriate healthy environment for bathing. System Requirements Specification In this system, the various equipments are used for the following purposes. Water will be used to bath the cat, the bathtub for bathing the cat, towel for drying the cat, shampoo for rinsing out the...
3 Pages(750 words)Article

Compound Interest

...Topic: Compound Interest Compound Interest - Instructor Graded Project You must show your work on all problems. You may type your answer right into this document. Total points for project: 45 points. Part I. Basic Computations 1. A.) Find the future value on $6,000 in three years if the interest is compounded semiannually at 12%. (5 points) FV = PV (1 + r)^t FV is the future value,PV is the present value,r is the rate ,^ is to the power of and t is the time. 6000(1+0.06)^6=8511.11$ FV=8511.11$ Answer: 8511.11$ B.) What is the compound interest earned? (5 points) Compound...
1 Pages(250 words)Assignment

Compound inequality

...implies that x must be greater than -2 and less than or equal to 3 -2 < x ≤ 3 This solution when represented on a simple line graph displays intersection of the graph of the inequalities. The second compound inequality is 5x + 3 ≤ - 2 or 13 – x ≤ 6 Solve the two inequalities independently. For the first part, 5x + 3 ≤ - 2 Subtract 3 from both sides of the inequality 5x ≤ -5 Divide both sides of the inequality by 5 x ≤ -1 For the second part, 13 – x ≤ 6 Subtract 13 from both sides of the inequality – x ≤ -7 Divide by -1 on both sides and reverse the inequality...
1 Pages(250 words)Speech or Presentation

Simple Coursework

...work 11 August The idea in the video which struck me as the most interesting is the discussion of possible costs and benefits of a sports project, which influences the urban economy on the whole and makes its own contribution to effectiveness of urban economy. The main problem (as stated by Dr. Robert Baade) is that the costs of a certain project are usually underestimated, and the benefits are overestimated. So the real results do not coincide with the planned ones. Dr. Baade refers to common families, saying that the more they become engaged with sports activities (watching professional games), the less they are engaged with other entertainments (pools, cinemas, theaters, etc.). As a result, municipal government...
1 Pages(250 words)Coursework

Chemical compound

...CHEMICAL COMPOUND Mineral spirits are chemical compounds that have hydrocarbons and are in liquid form. They come in various forms that include White spirits, some dry cleaning substances, among others. The debate on mineral spirits and their increasing danger to the society is widely discussed in this article Mineral Spirits Poisoning in New York Times dated Thursday, February 26, 2015. The widespread use of the mineral spirit especially in painting poses significant health risk to the people. This compound has fumes that are readily inhaled by an individual when using the mineral spirit for various issues and this may amount to poisoning .The severity of exposure to this...
1 Pages(250 words)Essay

Unknown compound

...in this experiment, the identity of the unknown was confirmed to be potassium sulfate. Introduction Physical and chemical characteristics can be used to determine the identity of an unknown compound. Physical properties are those that can be determined without changing the composition of the substance. These include color, taste, odor, melting and boiling point, conductivity and density of a substance. Qualitative analysis is the process of determining the composition of chemical substance in matter by conducting various chemical tests (Davis et al., 2005). Most aqueous samples of various salts can be tested for characteristic reactions by reacting them with dilute nitric acid, dilute hydrochloric acid, aqueous barium...
10 Pages(2500 words)Lab Report
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Simple and Compound Interest for FREE!

Contact Us