What is ‘Compound interest’?
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously-accumulated interest. Compound interest is standard in finance and economics.
Compound interest may be contrasted with simple interest, where interest is not added to the principal, so there is no compounding.
Compound Interest formula:
Formula to calculate compound interest annually is given by:
Compound Interest = P(1 + R/100)r
P is principle amount
R is the rate and
T is the time span
Input principle amount. Store it in some variable say principle. Input time in some variable say time. Input rate in some variable say rate. Calculate compound interest using formula, Compound Interest = principle * (1 + rate / 100) time). Finally, print the resultant value of CI.
Input : Principle (amount): 1200 Time: 2 Rate: 5.4 Output : Compound Interest = 1333.099243
Compound interest is 16288.9
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