What is compound interest?

Compound interest is compound interest, which means that the annual income can also generate income. Specifically, the whole loan period is divided into several sections. The interest calculated according to the principal in the previous section should be added to the principal to form an increased principal, which will be used as the principal basis for calculating the interest in the next section until the interest in each section is calculated. After summing up, the interest of the whole loan period is obtained, which is simply compound interest.

The characteristic of compound interest calculation is that the sum of the principal and interest at the end of the previous period is taken as the principal of the next period, and the principal amount of each period is different when calculating. The formula of compound interest is: S = P(I i)n, where the symbol I stands for interest, p stands for principal, n stands for term, I stands for interest rate, and S stands for principal and interest.

The formula for calculating compound interest of extended data is mainly divided into two calculation methods: one is to calculate compound interest at one time; The other is the calculation of equal multiple payment of compound interest.

Its characteristic is that the sum of the principal and interest at the end of the previous period is taken as the principal of the next period, and the amount of the principal of each period is different when calculating. It is mainly used to calculate the final value of principal and interest of multiple equal investments and the value of multiple equal payments.

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