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Compound interest. This is where you work out the interest on a number, then work out the interest on top of the number with the interest added.
The answer, assuming compounding once per year and using generic monetary units (MUs), is MU123. In the first year, MU1,200 earning 5% generates MU60 of interest. The MU60 earned the first year is added to the original MU1,200, allowing us to earn interest on MU1,260 in the second year. MU1,260 earning 5% generates MU63. So, MU60 + MU63 is equal to MU123. The answers will be different assuming different compounding periods as follows: Compounding Period Two Years of Interest No compounding MU120.00 Yearly compounding MU123.00 Six-month compounding MU124.58 Quarterly compounding MU125.38 Monthly compounding MU125.93 Daily compounding MU126.20 Continuous compounding MU126.21
When equals are added to equals, you don't necessarily get wholes. But whatever you do get, they're equal.
Any irrational number, when added to 13, will produce an irrational number.
What added to 7divided by10 gives 1 and 3divided by 10?
Interest is compounded semiannually if the interest is calculated every six months and added to the capital.
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"Compounded annually" means that the interest is added once a year.
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In terms of economics, compounded interest means the interest earned from the principal and added interest. In many cases, this method is always used by some internet scammers to lure people to invest.
Compounded means when something, like interest or growth, is added to the principal amount and then calculated on the new total. This results in exponential growth over time.
This is a term used while understanding the interest calculation for deposits. Compounded quarterly means - the interest would be compounded every quarter. Let us say you deposit $1000 in a bank @ 10% interest per year. One year = 4 quarters At the end of the 1st quarter: principal = 1000, Interest = 25 => Value of your investment at the end of the 1st qtr = $1025 At the end of the 2nd quarter: principal = 1025, Interest = 25.625 => Value of your investment at the end of the 1st qtr = $1050.625 If you see here, the interest earned here is 25.625 whereas the interest earned in the previous quarter was only $25. This is because for calculation of interest for the 2nd quarter, the interest earned in the first quarter would be added to the principal. Shorter the compounding interval more the interest earned.
Simple interest is based on the original principle of a loan. Simple interest is generally used on short-term loans. Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on.