Compound interest is quite similar to simple interest just that it is the amount of money earned. For example,if you leave a sum of $1000000(1 million)in your bank ,the interest rate is 50% and you leave it there for 10 years.The amount of money you will get after 10 years is
1 million x (50% x 10 years) = 1st year 1.5 million 2nd year = 2.25 million 3rd year .........
The final answer would be $57665039.06 whereby your money has grown almost up to 58 times the original amount! Note that a 50% interest rate is definitely impossible.
The formula for compound interest is
Amount= Original Amount(1 + interest/number of times compiled each year)to the power of
the number of years lapsed x the number of times compiled in a year.
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