In 1-2 sentences describe why compound interest earns more money than simple interest.

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navarromarysolov9ar5 navarromarysolov9ar5

24-10-2017
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In 1-2 sentences describe why compound interest earns more money than simple interest.

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Erudite1 Erudite1 · Answer 1 · 2017-11-03T14:05:00+01:00

Simple interest refers to the amount of money that one has to pay for borrowing a particular sum of money for a specified period of time.The simple interest is a one time calculated amount.
The compound interest is a type of interest in which the interest accrues over a period of time is compounded with the amount borrowed in order to arrive at a new principal amount. Compound interest has to be calculated regularly.
Compound interest earns more money than simple interest because the principal amount increases constantly as the result of the addition of accrued interest to the principal.