#### Event Title

Simple Interest as a Special Case of Compound Interest

#### Session

Management, Business and Economics

#### Description

In this paper it is shown that the simple interest can be considered as a special case of that compound one, and thus, we are able to calculate the effective interest rate (EIR) for simple interest deposits. Some examples of calculating the balance for simple interest deposits by using the formula for the balance of the compound interest and their corresponding effective interest rates are shown. A mathematical formula for calculation of the effective interest rate for simple interest deposits is given. Instructions of using the financial consultant CASIO FC -100V for accurate calculations, are also shown**.**

#### Keywords:

Simple Interest, Compound Interest, Effective Interest Rate.

#### Session Chair

Naim Preniqi

#### Session Co-Chair

Muhamet Gërvalla

#### Proceedings Editor

Edmond Hajrizi

#### ISBN

978-9951-550-19-2

#### Location

Pristina, Kosovo

#### Start Date

26-10-2019 5:15 PM

#### End Date

26-10-2019 6:45 PM

#### DOI

10.33107/ubt-ic.2019.388

#### Recommended Citation

Limani, Ramadan, "Simple Interest as a Special Case of Compound Interest" (2019). *UBT International Conference*. 388.

https://knowledgecenter.ubt-uni.net/conference/2019/events/388

Simple Interest as a Special Case of Compound Interest

Pristina, Kosovo

In this paper it is shown that the simple interest can be considered as a special case of that compound one, and thus, we are able to calculate the effective interest rate (EIR) for simple interest deposits. Some examples of calculating the balance for simple interest deposits by using the formula for the balance of the compound interest and their corresponding effective interest rates are shown. A mathematical formula for calculation of the effective interest rate for simple interest deposits is given. Instructions of using the financial consultant CASIO FC -100V for accurate calculations, are also shown**.**