Simple Interest vs Compound Interest
Ito ang game-changer sa loan analysis! Ang simple interest ay calculated lang sa principal amount - hindi kasama ang previously earned interest. Mas straightforward to calculate gamit ang formula: SI = P × r × t.
Example: Si Juan nag-loan ng ₱50,000 sa 8% simple interest for 3 years. SI = 50,000 × 0.08 × 3 = ₱12,000. Total babayaran = ₱62,000.
Pero ang compound interest ay different story. Calculated ito not just sa principal but also sa accumulated interest from previous periods. Formula: A = P1+r/n^nt. Same amount, same rate, same period - si Maria ay magbabayad ng ₱62,985.60, which is ₱985.60 more!
Money Fact: Ang compound interest ay "interest on interest" - kaya nga sabi ni Einstein, it's the most powerful force in the universe!