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what is compound interest rate. Compound Interest Rate P 1i t P. Compound interest is the addition of interest to the principal sum of a loan or deposit or in other words interest on interest.
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The time period it changes with time. Compound interest is interest earned on money that was previously earned as interest. Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one.
Compound interest is the addition of interest to the principal sum of a loan or deposit or in other words interest on interest.
Compound interest accelerates your. So in the above example in year two youd earn 1 percent on 1010 or 1010 in interest payouts. Simple interest is the interest generated only from the principal. Compound interest is standard in finance and economics.
