Compound interest is a fundamental concept in finance that involves earning interest on both the initial principal and the accumulated interest from previous periods. This article delves into the mechanics of compound interest, how it differs from simple interest, and provides examples of how to calculate it using a formula or a table. Understanding compound interest is crucial for anyone looking to maximize investment returns or manage debt over time.
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1
In finance, ______ interest involves earning interest on both the initial investment and the previously earned interest.
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2
Compound Interest Definition
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3
Compound Frequency Impact
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4
Alternative Compound Interest Calculation
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5
Depositing £______ in a savings account at a 4% interest rate for ______ years, the investment's future value is £4499.46.
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6
Simple Interest Calculation Basis
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7
Interest Accrual Pattern for Simple Interest
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8
Typical Usage of Simple vs. Compound Interest
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9
Compound interest involves adding interest to the ______ sum, allowing interest payments to potentially earn more interest.
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