ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Compound interest is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods.

Detailed explanation-2: -Compound interest is the interest on a deposit calculated based on both the initial principal and the accumulated interest from previous periods. 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-3: -Compound interest is interest calculated on an account’s principal plus any accumulated interest. If you were to deposit $1, 000 into an account with a 2% annual interest rate, you would earn $20 ($1, 000 x . 02) in interest the first year. Assuming the bank compounds interest annually, you would earn $20.40 ($1, 020 x .

Detailed explanation-4: -Compound interest is the interest calculated on the principal and the interest accumulated over the previous period. It is different from simple interest, where interest is not added to the principal while calculating the interest during the next period. In Mathematics, compound interest is usually denoted by C.I.

Detailed explanation-5: -Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”