Can anybody plz explain me that what is compond interest. I am unable to undestand. Plz expalin in easy language... dont copy from net... bcoz i want to clear my concept so plz make me understand in hindi ki wo hota kya hai
Answers
Answer:
Compound interest is the addition of interest to the principal sum of a loan or deposit
Step-by-step explanation:
Answer:
Answer:
I'm not fluent in Hindi sorry, but I'll try my best to explain it in English.
Basically Compound Interest means the interest you earn from your interest. Say you've deposited 100Rs in the bank. You get certain interest on it depending upon the rate percent given by the bank. Suppose you get 10Rs interest for first year, you're total amount now is Rs 110.
If you leave it for another year in the bank, you're interest will be calculated on the new amount(110) so you may get an interest of say 12Rs. Now your total amount is 122Rs. This goes on depending upon the duration for which the money is kept in the bank.
In simple interest, the interest is calculated only the original amount all the time, so assuming rate percent remains constant, in 2 years you will have 100 + 10 + 10 = Rs120
Here, you can see we make more money from compound interest.
This may seem like a small profit but when taken formal large principle, you can really make a lot of money