Total interest = 1 19.37-50=69.37.
Difference = 69.37-45 = 243,700.
1. calculation formula of simple interest and compound interest present value calculation formula (simple interest and compound interest) simple interest calculation formula: total interest = principal x interest rate x year n compound interest calculation formula: total principal = principal X( 1+ interest rate) year n compound interest final value calculation: present value X( 1+ interest rate) x number of periods = present value.
According to the compound interest calculation, the total interest = 1 00000x (1+4%) 30 = 3243397.51yuan, of which 2243397.55438+0 yuan (interest of insurance company), plus the principal1ten thousand. Sum of simple interest calculation: 1000000x4% x30 =1200000 (bank interest), plus the principal100000, the total is 220000 yuan. It can be seen that for the same principal and different calculation methods, the difference between simple interest and compound interest after 30 years is as high as 654.38+0.04 million.
Secondly, Buffett and Gerlach, the fathers and teachers of securities, put forward a concept: interest guarantee multiple. It is the profit of the enterprise/individual/the loan interest of the enterprise/individual. If the enterprise/individual has a surplus after paying off the loan interest, the surplus can repay the loan principal until all the loans are paid off. Since Grachi experienced the Great Depression, he paid special attention to the solvency of an enterprise/individual. He even thinks that whether an enterprise/individual has solvency is more important than whether it has collateral.
Simple interest: No matter how long the deposit period is, only the interest of the investment principal is charged, and the previous interest will not be added to the principal to calculate the interest. Compound interest: add the interest of the previous period to the principal, and calculate the interest of the next period as part of the principal, which is also commonly known as "rolling interest". Formula simple interest calculation: sum of principal and interest = principal *( 1+ simple interest rate * number of periods) compound interest calculation: sum of principal and interest = principal *( 1+ compound interest rate) number of periods means that the deposit is 1 ten thousand yuan, assuming the interest rate is 4% (simple interest). Then the total principal and interest after 10 years is:100 * (1+4% *10) =1.4 million yuan. If the interest rate is compound interest, the sum of principal and interest after 10 years is: 100.