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kupik [55]
3 years ago
14

Why is compound interest preferable to simple interest?

Business
2 answers:
Ad libitum [116K]3 years ago
7 0

Both types of interest consist of a percentage that will be added to the loan amount over time. The difference is that simple interest applies to each period under the amount but not to the cumulative total. In contrast, compound interest yields under the amount and yield of the previous month, ie interest is applied under the previous total (amount + interest). Therefore, for those who lend the value, compound interest is more advantageous.

For example, consider a $ 100 loan applied at a rate of 5% for 2 months.

Simple Interest:

Month 1: 100 * 0.05 = $ 5

Month 2: 100 * 0.05 = $ 5

Loan Total: $ 100 + $ 5 + $ 5 = $ 110

Compound Interest:

Month 1: 100 * 0.05 = $ 5

Month 2: 105 * 0.05 = $ 5.25

Total Loan: $ 100 + $ 5 + $ 5.25 = $ 110.25

Therefore, compound interest is better than simple interest because it will yield more over time.

11111nata11111 [884]3 years ago
6 0
Assuming that the answer choices I am thinking of are correct, the right answer is D- Compound interest pays interest on the principal and the interest earned in each period.  Hope this helps.
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The element that Amy should address is the Chain of command.

Explanation:

A chain of command is a system for sending inside information of organizations with strong, vertical and authoritative structures.

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We must take into account the Authority and the Unit of command. This last is very important because it states that each supervisor must inform only one superior and like this the company preserves the continuous line of authority so all employees are heard and their ideas are taken into consideration for making decisions.  

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3 years ago
On January 1, 2016 Dinwiddie Company purchased a car that cost $45,000. The car had an expected useful life of 6 years and a $10
disa [49]

Answer:

.B. The amount of depreciation expense recognized in 2019 would be greater if Dinwiddie depreciates the car under the straight-line method than if the double declining balance method is used

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Answer:

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