# What is compound interest?

compound interest is interest on interest and again interest on
amount together with principle plus interst

When. Interest compiles eg you have 10% interst on 100 , so after a
year you have 110 10% again 11 pounds so you have 121 next year 10%
you have 133.10 and so on

compound interest is interest that is added each year from you
profits that year, an example to make this easier - say you had 200
pounds in your bank and the company was giving you ten percent per
annum. after your first year you will have made 220 pounds as you
take ten percent (£20) from your balance and add it on. The next
year say you have the same £220 another ten percent will be added-
ten percent of 220 not 200.

### What are the major differences between compound interest loan and simple interest loan?

With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater. With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater. With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same…

### Is the annual interest rate the same as simple interest?

Usually no. Most institutions charge (and pay) compound interest, NOT simple interest. Usually no. Most institutions charge (and pay) compound interest, NOT simple interest. Usually no. Most institutions charge (and pay) compound interest, NOT simple interest. Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.