IS MADE BY POWER POINT PRESENTATION V.365, EXPECT SOME ERRORS OR UN FUNCTIONAL EFFECTS IF OPENED IN NOT UPDATED OR SAME VERSION OF POWER POINT PRESENTATION. THANK YOU! MATHEMATICS COMPOUND INTEREST SUBMITTED TO: MS. SHIN DELAROSA WHAT IS COMPOUND INTEREST?
• Compound interest is the
interest on savings calculated on both the initial principal and the accumulated interest from previous periods. WHAT IS COMPOUND INTEREST?
• "Interest on interest," or the
power of compound interest, is believed to have originated in 17th-century Italy. It will make a sum grow faster than simple interest, which is calculated only on the principal amount. WHAT IS COMPOUND INTEREST?
• Compounding multiplies money
at an accelerated rate and the greater the number of compounding periods, the greater the compound interest will be. KEY TAKEAWAYS! Compound interest is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.
Generating "interest on interest" is known as the
power of compound interest. KEY TAKEAWAYS! Interest can be compounded on any given frequency schedule, from continuous to daily to annually
Compounding multiplies money at an accelerated
rate. HOW DOES COMPOUND INTEREST WORKS? Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one. The total initial amount of the loan is then subtracted from the resulting value.