**Compound Interest vs Simple Interest**

**Simple Interest (S.I.)**
- Simple Interest is calculated only on the principal amount.
- The formula for Simple Interest is: \(S.I. = \frac{P \times R \times T}{100}\), where P is the principal amount, R is the rate of interest, and T is the time period.
- Simple Interest does not take into account the interest earned or paid on previously earned interest.

**Compound Interest (C.I.)**
- Compound Interest is calculated on both the principal amount and the interest earned on it.
- The formula for Compound Interest is: \(C.I. = P \left(1 + \frac{R}{100}\right)^n - P\), where P is the principal amount, R is the rate of interest, and n is the number of compounding periods.
- Compound Interest takes into account the interest earned or paid on previously earned interest, leading to higher returns or payments compared to Simple Interest.

**Examples of Compound Interest and its Applications**
1. **Savings Accounts**: When you deposit money in a savings account, you earn interest on your initial deposit (principal) as well as on the interest earned over time. This is an example of compound interest.
2. **Investments**: Compound interest is widely used in investments such as mutual funds, fixed deposits, and bonds. The returns on these investments are calculated using compound interest formulas.
3. **Loans**: When you take out a loan, the interest accrued is often calculated using compound interest. This means that you not only pay interest on the principal amount but also on the interest that has accumulated over time.

In conclusion, Compound Interest is more beneficial in the long run compared to Simple Interest as it takes into account the compounding effect on the interest earned or paid. It is important to understand the difference between the two when making financial decisions.