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Compound Interest

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Sam Site Admin Joined: 21 May 2005 Posts: 198 Location: CALIFORNIA 92.34 Dollars($)	Posted: Thu Apr 08, 2004 3:55 am    Post subject: Compound Interest Compound Interest is interest paid on the original principal balance,and on the accumulated and unpaid interest. This interest is calculated by adding the interest earned in the current period to the principal amount and computing the next period?s interest on this ?compounded? total amount. For example, Andrew took a loan of $400,000 at 10% interest rate for 2 years. We know Quote: Compound interest = P(1+r)^n where P=Principal, r=interest rate and n=number of years Thus, compound interest for Andrew = $84,000.

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