Glossary › Money and tax
Compound interest
Interest that is earned on the interest as well as on the original amount.
Each period, the interest is added to the balance, and the next period's interest is worked out on the larger balance. The more often it compounds, the faster the balance grows.
Write the amount, the rate and the time, and add “compounded monthly” when it matters.
In Ratio
| You type | Ratio shows |
|---|---|
10k at 4% for 5 years | 12,166.529 |
5000 at 7% for 3 years compounded monthly | 6,164.6279 |