Compound Interest or Simple Interest

srinivas (Accounts Manager) (89 Points)

28 January 2023  

Dear sir,

I need to calculate interest for 2 years on some outstanding amount.

The Agreement contains an interest clause and it is to be calculate interest 1% per month.

I have a doubt that it is 12% per annum with yearly compounding - or

12% per annum with monthly compounding.

Please advice me in which procedure i have to follow for calculation of interest.

It is more useful to me if provide any support for the procedure to be followed.

Thank you all.