Need business and finance help with Simple and Compound Interest

timer Asked: Nov 20th, 2015
account_balance_wallet $5

Question Description

It is good to know about simple interest loans. If I ever need a loan in the future, now I have more knowledge and can ask more in-depth questions to ensure I am making the right choice. I would of course always try to get a loan that is a simple interest loan so that I would only be paying interest on the principle. I would never think to take advantage of a compound loan due to all of the interest that would accrue. 

I don't understand how charging interest on top of interest can be fair.

Tutor Answer

Philosopher Leni
School: Boston College

Thank you for the opportunity to help you with your question!

when a default on a loan  is made, collectors often try to increase up the debt, heaping interest and fees atop the balance you already owe.and this is really bad.

Consumer advocates advise that you should turn a skeptical eye on these claims and should not let them manipulate you.. It might be legal for a debt buyer to charge interest on money it never loaned to you, but the amounts they can tack on are limited and courts are increasingly forcing them to justify their claims.

Please let me know if you need any clarification. I'm always happy to answer your questions.

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awesome work thanks

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