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.
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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
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 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.