Question

When interest is compounded annually but time is a fraction?

Answer 1

Answer:

This is the aptitude questions and answers section on "Compound Interest Important Formulas" with explanation for various interview, competitive examination and entrance test. Solved examples with detailed answer description, explanation are given and it would be easy to understand.

Explanation:

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. Compound interest is standard in finance and economics.