Respuesta :
Answer:
compound interest- interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan.
Explanation:
The method of calculating the interest where the interest gained over the specified time is summed up to the principal.
Explanation:
In simple words, calculation of compound interest includes the principal and accumulated interest of the previous year of deposit. It is considered to be magical word as it helps in building wealth.
For example, assume ABC company invests 20$ in a bank with 5% interest per annum (year) for 10 years so, here the compound interest is . The compound interest can be calculated with the following formula,
[tex] \bold{\text { Compound Interest }(C I)=P\left(1+\frac{r}{n}\right)^{n t}-P} [/tex]
where, A is the Amount; P is the principal; r is the rate of interest; n is the number of times the interest is compounded per unit‘t’ and t is time or number of years.
