How can you tell between simple interest and compound interest?
Assume you toss $100 to a bank in which it gives you 1% interest a monthSIMPLE
Month What you have
Month 1 [Initial $100]+{ [Interest $1]}
Month 2 [Initial $100]+{ [Interest $1]+ [Interest $1]}
Month 3 [Initial $100]+{ [Interest $1]+ [Interest $1]+ [Interest $1]}
Month 4 [Initial $100]+{ [Interest $1]+ [Interest $1]+ [Interest $1]+ [Interest $1]}
...
Compound
Month 1 {[Initial $100]+[Interest $1]}
Month 2 {[Initial $101]+[Interest $1.01]}
Month 3 {[Initial $102.01]+[Interest $1.0201]}
Month 4 {[Initial $103.0301]+[Interest $1.030301]}
...
Final Words, know what you are doing before you are investing.
