0
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.
Still curious? Ask our experts.
Chat with our AI personalities
Coach
Beau
FranAdd your answer:
Earn +20 pts
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.
