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Fundamental
Compound Interest
Interest on principal plus accumulated interest
Definition
Compound interest calculates interest on both the initial principal and accumulated interest from previous periods. This creates exponential growth over time. The formula is: A = P(1 + r/n)^(nt), where A is final amount, P is principal, r is rate, n is compounding frequency, and t is time.
Related Topics
#interest
#exponential growth
#time value of money
#compounding
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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