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Compound interest

This calculator computes compound interest
Timur2008-05-07 06:40:37

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Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding.

The compounding usually happens with some frequency (yearly, half-yearly, quarterly, monthly, daily, etc.) Usually banks define nominal interest rate (f.e. 12%) and frequency of compounding (f.e. monthly).
S=P(1+\frac{j}{m})^{mn},
where
S - balance
P - principal
j - nominal interest rate (fraction of 1)
m - compounding frequency (number of compounding periods per year)
n - term (years)

Compound interestCreative Commons Attribution/Share-Alike License 3.0 (Unported)
0.12345678901234567890
 Balance (yearly compounding):
 Balance (half-yearly compounding):
 Balance (quarterly compounding):
 Balance (monthly compounding):





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