y is he teaching us simple interest when the q is abt compound interest??
y is he teaching us simple interest when the q is abt compound interest??
Dear user!
The main difference between simple interest and compound interest is that in case of simple interest, the principal remains constant throughout, whereas in the case of compound interest, it goes on changing periodically.
In compound interest, the principal for the second period is the sum of the principal for the first period and the simple interest for the first period. Similarly, the principal for the third year is the sum of the principal for the second year and the simple interest for the second year and so on.
From the above concept, the formula for compound interest is derived or compound interest can be calculated with the concept of simple interest (without using formula).
Hope! You got the answer.
Dear user!
The main difference between simple interest and compound interest is that in case of simple interest, the principal remains constant throughout, whereas in the case of compound interest, it goes on changing periodically.
In compound interest, the principal for the second period is the sum of the principal for the first period and the simple interest for the first period. Similarly, the principal for the third year is the sum of the principal for the second year and the simple interest for the second year and so on.
From the above concept, the formula for compound interest is derived or compound interest can be calculated with the concept of simple interest (without using formula).
Hope! You got the answer.
