Question

What is compound interest

Answer 1

The interest that is calculated on the amount of the previous year is known as compound interest .

(Annually) If P=Principal

R=Rate of interest

N=Time period (yrs)

A=Amount with

interest after n yrs.

Then , A= P(1+R/100)

CI = A-P

Rate Compounded semiannually / halfyearly / six monthly

Then , R= R/2

&

n= 2n (count no. of 6monthly

(monthly) in the given yrs)

hope it help

Answer 2

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, 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.