answersLogoWhite

0

The concept is that at the end of each time interval, the interest for that period is added to the principal. As a reult, the interest for any period is calculated not only on the principal but also the interest from previous periods.

User Avatar

Wiki User

11y ago

Still curious? Ask our experts.

Chat with our AI personalities

BlakeBlake
As your older brother, I've been where you are—maybe not exactly, but close enough.
Chat with Blake
ProfessorProfessor
I will give you the most educated answer.
Chat with Professor
JudyJudy
Simplicity is my specialty.
Chat with Judy

Add your answer:

Earn +20 pts
Q: What is the concepts of compound interest?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Math & Arithmetic

What are the major differences between compound interest loan and simple interest loan?

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.


What are some of the uses of compound interest in business?

compound interest increases interest more than simple interest


Interest earned on interest is known as?

Compound Interest


Is the annual interest rate the same as 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.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.


What is the value of compound interest?

Compound interest increases the amount earned by adding credited interest to the principal, and interest will then be earned on that money as well. The longer the principal and interest remain in the account, the greater the earnings they will accrue.