If an investor puts 1000 into an investment that earns 5 annually that investment will pay 50 in year 1. Compound interest is the interest paid on both principal and interest compounded in regular intervals. Given P 2340.
Using the simple interest formula for future value.
In the case of daily compounding it would be 365 and so on. Think of compound is as earning interest upon interest or as Merriam-Webster puts it. E stands for the Napiers number which is approximately 27183. The bank gives you a 6 interest rate and compounds the interest each month.