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What is the Difference Between Simple Interest and Compound Interest?

Objective:

  • Simple interest and compound interest explained 

Environment:

  • Clio Web App

Additional Information:

n/a

Answer:

  • Simple interest is calculated based on the principal amount (the initial amount charged to the client). 
  • Simple Interest=(Principle) x (Interest Rates) x (Time) 
  • Compound interest is calculated on the principle plus any interest accrued on the Bill.   
  • Compound Interest= Principal x (1+Interest)Number of Periods - Principal 
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