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• The difference with compound interest is that the interest earns interest, not just the principal
• The benefit is that investments earn at a faster rate than if simple interest was being paid.
Example: calculate both simple and compound interest on $1000 at 3.6% for 5 years.
1.2/1.3 - Compound InterestSeptember-15-151:54 PM
Chap 1 - Investing Page 1
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