What are simple and compound interest?
Simple interest
The formula for simple interest yield is as follows.
Simple Interest = Principal x Interest Rate x Duration
For example, when we deposit 1000 currency unit of money in the bank with 10% (0.1%) interest for 3 years.
We have 1000 x 0.1 x 3= 300 currency unit total return.
Compound interest
Total money earned at the end of the period =
Principal.(1+monthly interest)^number of periods
For example, when we deposit 1000 currency unit of money in the bank with 10% (0.1%) interest for 3 years.
1000 x (1+0.1) over 3= 1331 wire, ie 1331-1000=331 currency unit interest earnings.