Defination of compound interest
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Compound interest (or compounding interest) is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. Thought to have originated in 17th-century Italy, compound interest can be thought of as “interest on interest,” and will make a sum grow at a faster rate than simple interest, which is calculated only on the principal amount. The rate at which compound interest accrues depends on the frequency of compounding; the higher the number of compounding periods, the greater the compound interest. Thus, the amount of compound interest accrued on $100 compounded at 10% annually will be lower than that on $100 compounded at 5% semi-annually over the same time period.
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Hi!
Definition of compound interest is:-
The money borrowed on a simple interest is called principal. The difference between the amount and the principal is called compound interest (CI).
The formula to find compound interest is:-
A= P×(1+R/100)^n
{P×(1+R/100)^n} -P
P= principal
A=amount
R= rate p.a%
n= T=Time or years
In case, the T is a mixed fraction, then the following formula is applicable:-
Take for e.g n= 5 3/5 years, then
A= {P×(1+ R/100)^5 × (1+ 3/5 ×R/100)}
CI= A-P
Thank You
(Hope This Helps)
Definition of compound interest is:-
The money borrowed on a simple interest is called principal. The difference between the amount and the principal is called compound interest (CI).
The formula to find compound interest is:-
A= P×(1+R/100)^n
{P×(1+R/100)^n} -P
P= principal
A=amount
R= rate p.a%
n= T=Time or years
In case, the T is a mixed fraction, then the following formula is applicable:-
Take for e.g n= 5 3/5 years, then
A= {P×(1+ R/100)^5 × (1+ 3/5 ×R/100)}
CI= A-P
Thank You
(Hope This Helps)
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