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100 FAQ's on Basic Finance

Module Units

What is Compound Interest?

Compound interest is the method where interest is calculated on the principal and the interest accumulated over the previous period. It is interest on interest.

 

The compound interest formula is given as:  

 

             A = P(1+R/n)nt
Where,
A = amount
P = principal
R = rate of interest
n = number of times interest is compounded per year
t = time (years)

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Units 11/101