Compound Interest | ||||
COMPOUND
INTEREST Compound Interest also attracts interest. Example P = 800 Interest year 1= 0.1 x 800= 80 New P = 800 + 80 = 880 Interest on 880 = 0.1 X 880 = 88 New P = 880 + 88 = 968 Calculation using Excel along with formula is given in the following slide:
S = Money accrued after n years also called compound amount P = Principal r = Rate of interest n = Number of periods S = P(1 + r/100)^ n Compound interest = S - P | ||||
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