Compound interest works like this.
Take a principle (The amount of money you deposit) of $10,000.
Lets say that the interest rate is 8% and that it compounds anually.
At the end of one year you would have $10,800.
With simple interest, at the end of two years, you would have $11,600 because you only earn interst on the principle.
After three years you would have $12,400.
However, with compound interest, you will earn interest on not just the principle, but the compounded interest as well.
Therefore, with compound interest, at the end of two years, you would have 11,664.
After three years it would be $12,597.12 and so on.
With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.
For the second (and subsequent) periods, if the interest is to be calculated for the original sum PLUS the interest earned so far then it is compound interest. If only the original amount earns interest in all periods then it is simple interest.
compound interest increases interest more than simple interest
Compound Interest
Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.
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.
compound... yes it is compound interest.
With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.With compound interest, the interest due for any period attracts interest for all subsequent periods. As a result, compound interest, for the same rate, is greater.
There is simple interest and there is compound interest but this question is the first that I have heard of a simple compound interest.
For the second (and subsequent) periods, if the interest is to be calculated for the original sum PLUS the interest earned so far then it is compound interest. If only the original amount earns interest in all periods then it is simple interest.
its compound interest
compound interest increases interest more than simple interest
Compound interest.
There is no carrot in the compound interest formula!
It depends on which compound interest formula you mean. Refer to the Wikipedia Article on "Compound Interest" for the correct terminology.
Compound interest
Compound Interest