CLAT  >  Introduction: Basic Concept of Simple Interest and Compound Interest

# Introduction: Basic Concept of Simple Interest and Compound Interest Video Lecture - Quantitative Techniques for CLAT

## Quantitative Techniques for CLAT

46 videos|69 docs|95 tests

## FAQs on Introduction: Basic Concept of Simple Interest and Compound Interest Video Lecture - Quantitative Techniques for CLAT

 1. What is the difference between simple interest and compound interest?
Ans. Simple interest is calculated only on the initial principal amount, while compound interest is calculated on both the principal amount and the accumulated interest from previous periods.
 2. How is simple interest calculated?
Ans. Simple interest is calculated using the formula: Simple Interest = (Principal amount) x (Interest rate) x (Time period).
 3. How is compound interest calculated?
Ans. Compound interest is calculated using the formula: Amount = Principal amount x (1 + Interest rate/100)^(Time period).
 4. Which type of interest is more beneficial for long-term investments?
Ans. Compound interest is more beneficial for long-term investments as it allows the interest to be reinvested and earn additional interest over time.
 5. How does the frequency of compounding affect the interest earned in compound interest?
Ans. The frequency of compounding affects the interest earned in compound interest. Higher frequency of compounding, such as annual or quarterly, leads to higher interest earnings compared to lower frequency, such as semi-annual or biennial compounding.

## Quantitative Techniques for CLAT

46 videos|69 docs|95 tests

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