Test 31 of 39

Compound Interest


Compound interestĀ is the addition ofĀ interestĀ to theĀ principal sumĀ 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 inĀ financeĀ andĀ economics.

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