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Simple Interest vs Compound Interest

Interest calculations fall into two categories. Simple interest and compound interest.

  • With Simple interest, you work out the interest on the initial amount based on the interest rate and you add that amount each year to the amount you have.
  • With Compound interest, the interest is calculated on the amount you currently have that year and aded to your amount.

Here is a short video explaining the 2 types using an example.

The full video lessons on both types of interest are found by following these 2 links.

- Simple Interest            
- Compound Interest