Question

What is compound Interest

Answer 1

addition of interest to the principal sum of deposit is called compounding. compound interest is interest on interest . it is the result of reinvesting interest, rather than paying it out , so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

Answer 2

The addition of interest to the principal sum of a loan or deposit is called compounding. Compound interest is on interest. It is the result of reinvesting interest rather than paying it out so that Interest in the next period is then earned on the principal sum plus previously accumulated sum.