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It helps calculations if you think about compound interest as your money increasing every period (for instance, every year) by a certain factor. For example, if you get 5% interest per annum, your capital will increase by a factor of 1.05 every year. If you repeat this, say, 10 years, then your capital will obviously increase by a factor of 1.0510.
The detailed formula for the capital you have after a number of periods is thus:
(initial capital) x (1 + rate/100)periods
If you want to know only how much interest you earned, rather than the total money you'll have, just subtract the initial capital.
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What is the interest rate of 13.75 percent compounded monthly is equivalent to a daily compounded interest rate?
14.651
What is the interest and balance of 375 at 4 percent for 5 years?
If compounded, interest = 81.244 and balance = 456.245 If not compounded, interest = 75 and balance = 450
Is interest on a judgment compounded?
Yes.
What is the monthly interest rate of and annual 10 percent rate?
It is 0.833... recurring % if the interest is simple, or compounded annually. If compounded monthly, it is approx 0.797 %
How many interest will you get for 1 million?
It depends on the rate of interest, how it is compounded, and how long it draws interest.
