Simple & Compound Interest
Section: Word ProblemsBank code: WRD-INTGRE frequency: MediumPro
1. Core Idea
- Simple interest: the interest is calculated on the original principal every period. Growth is linear.
- Compound interest: the interest is calculated on the running balance, so you earn interest on interest. Growth is exponential.
Compound always beats simple after the first period, and the gap widens over time.
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