ALIEN WHATS THE FIFFRENCE BETWEEN SIMPLE AND COMPOUND INTEREST PLEAE HELP I ONLY HAVE LESS THAN A DAY TO REVIEW FOR MY FINALS
also whats an fcp..
Alright, here's an example. Let's say you have $200 in a simple interest account and a compound interest account.
Simple interest is when your earnings increase a set amount, let's say $3 a year for simplicity. So, after 20 years, you would have a total of $260 ; $200 that you started with and $60 you accumulated as interest.
Compound interest is when your earnings increase by a set percentage, 3% for instance. Every year, 3% will be calculated from your total amount and added on top of it. This is recurring interest, so the first year might be $6 added in for a total of $206, but the next year, the account would take 3% of the $206 instead of 3% of the $200.
So, after 20 years with a compound interest account at 3%, you would have $364.15
Compound interest is the best kind of interest account to hold, for clear reasons. You let that money sit and accumulate, adding more and more, and by retirement age, you'll have a little bit of spending money to use!
Hope this helps!
P.S. I'm not sure what Full Cost Pricing is completely, but from my understanding, it's the price when a company marks up the manufacturing price to include their own costs of time and labor in packing/distribution/delivery/etc.
