I believe you mean, how is the equation derived. It is actually quite simple. Every time you add (for example) 5%, the capital increases by a factor of 1.05. This factor is calculated as 1 + 5/100, in this example. Multiplying repeatedly by this factor is equivalent to raising the factor to a power. For example, in 4 years, and assuming an initial capital of 1000, you get 1000 x 1.05 x 1.05 x 1.05 x 1.05, which is the same as 1000 x 1.054.
If the rate of annual interest is r% the period is n years and the amount invested is y Then the compound interest is y*(1+r/100)^n - y
S=P(1+r)^n
A=Pe^rt A=Total Invested P=Principal r=Rate t=time
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.
compound interest increases interest more than simple interest
If the rate of annual interest is r% the period is n years and the amount invested is y Then the compound interest is y*(1+r/100)^n - y
S=P(1+r)^n
A=Pe^rt A=Total Invested P=Principal r=Rate t=time
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.
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