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Compound interest earns returns on both the initial principal and previously accumulated interest. This creates exponential growth. Simple interest, by contrast, only grows on the original principal.
Stapsgewijze handleiding
- 1A = P(1 + r/n)^(nt) for periodic compounding
- 2A = Pe^(rt) for continuous compounding
- 3Rule of 72: years to double ≈ 72 ÷ annual rate %
Uitgewerkte voorbeelden
Invoer
$1,000 at 5%, 10 yrs (annual)
Resultaat
$1,628.89
Interest: $628.89
Invoer
$1,000 at 5%, 10 yrs (monthly)
Resultaat
$1,647.01
$18 more from monthly compounding