Difference between revisions of "Calculate Compound Interest"
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Compound interest is distinct from simple interest in that interest is earned both on the original investment (the principal) and the interest accumulated so far, rather than simply on the principal. Because of this, accounts with compound interest grow faster than those with simple interest. Additionally, the value will grow even faster if the interest is compounded multiple times per year. Compound interest is offered on a variety of investment products and also charged on certain types of loans, like credit card debt.<ref>http://www.investopedia.com/terms/c/compoundinterest.asp</ref> Calculating how much an amount will grow under compound interest is simple with the right equations. | Compound interest is distinct from simple interest in that interest is earned both on the original investment (the principal) and the interest accumulated so far, rather than simply on the principal. Because of this, accounts with compound interest grow faster than those with simple interest. Additionally, the value will grow even faster if the interest is compounded multiple times per year. Compound interest is offered on a variety of investment products and also charged on certain types of loans, like credit card debt.<ref>http://www.investopedia.com/terms/c/compoundinterest.asp</ref> Calculating how much an amount will grow under compound interest is simple with the right equations. | ||
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== Steps == | == Steps == | ||
