ECONOMICS (CBSE/UGC NET)

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: -Compound interest is the interest you earn on interest. This can be illustrated by using basic math: if you have $100 and it earns 5% interest each year, you’ll have $105 at the end of the first year. At the end of the second year, you’ll have $110.25.

Detailed explanation-3: -Essentially, compounding refers to earning interest on previously earned interest. Compound interest is calculated as a fixed percentage of both your initial deposit (principal) plus any interest earned during the previous compounding period.

Detailed explanation-4: -Compounding typically refers to the increasing value of an asset due to the interest earned on both a principal and accumulated interest. This phenomenon, which is a direct realization of the time value of money (TMV) concept, is also known as compound interest.

Detailed explanation-5: -What is compounding? Drug compounding is often regarded as the process of combining, mixing, or altering ingredients to create a medication tailored to the needs of an individual patient. Compounding includes the combining of two or more drugs. Compounded drugs are not FDA-approved.