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ADNAN MUHAMMED

Grade 12,

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sir, i cannot understand compound intrest.

sir, i cannot understand compound intrest.

Grade:8

1 Answers

Vijay Mukati
askIITians Faculty 2590 Points
8 years ago
In compount interest, the principle amount on which the rate of percentage is being used is increasing every year (if compounded annually) and will be equal to the principle value + interset for that year and this becomes the principle value for the next year and so on. That means the principle is not same here as in simple intereset but keeps on increaing depending upon the rate and the duration of rate compounded. Thanks.

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