Everything else held constant, an account that earns compound interest will grow more quickly than an otherwise identical account that earns simple interest. This statement is true.
Compound interest means that in addition to the interest on your assets, you are also receiving interest on interest in your investment account. The most crucial idea to grasp when accumulating wealth over the long run is compound interest.
Simple Interest is a formula that uses the principal amount, the interest rate, and the number of periods for which the interest is to be paid to determine the amount of interest that must be paid on the principal.
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