BANKING AFFAIRS

Detailed explanation-1: -Compound interest is the interest on a deposit calculated based on both the initial principal and the accumulated interest from previous periods. 1. Or, more simply put, compound interest is interest you earn on interest . You can compound interest on different frequency schedules such as daily, monthly or annually.

Detailed explanation-2: -Interest-on-interest, also referred to as ‘compound interest’, is the interest that is earned when interest payments are reinvested.

Detailed explanation-3: -Compound interest is the interest you earn on interest. In short, you make an initial investment and receive a particular rate of return your first year which then multiplies year over year depending on the interest rate received.

Detailed explanation-4: -Compound interest is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods. “Interest on interest, ” or the power of compound interest, is believed to have originated in 17th-century Italy.

Detailed explanation-5: -Here’s how you can use it to turn $1k in savings into $117k. If your investment account earns compound interest, then you are earning interest on interest as well as on your investments. Compound interest is undoubtedly the most important concept to understand when building wealth for the long term.