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Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus the interest that has already been earned. This makes compound interest grow faster over time.
SI = P × R × T / 100
A = P × (1 + R/(100×N))^(N×T)
Where N is compounding frequency per year
Simple interest is calculated only on the principal amount, while compound interest is calculated on both principal and accumulated interest.
Compound interest is beneficial for long-term investments as interest earns interest over time.
Interest can be compounded annually, semi-annually, quarterly, monthly, or daily depending on the investment.
A = P(1 + r/n)^(nt), where A is the amount, P is principal, r is rate, n is compounding frequency, t is time.
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