2007-04-23 06:52:08 · 5 answers · asked by Bond 1 in Business & Finance ➔ Investing
Compound interest is interest that you gain on the interest. If you have simple interest at 10% for 10 years your money would double. If you get it paid every year then it will double in about 7.2 years. If the 10% is compounded daily you do AMT(1+i/365)^365. This is about equal to 10.5% APY.
2007-04-23 07:02:52 · answer #1 · answered by Nelson_DeVon 7 · 1⤊ 0⤋
Example; You owe $100 with 20% interest. So your balance is $120. You make a minimum payment of $10. Now your balance is $110. Then the next month starts and your charged 20% interest on your $110 balance. So now you owe $132. You were just charged interest on borrowed interest. Enjoy.
2007-04-23 13:57:03 · answer #2 · answered by Tim 6 · 1⤊ 0⤋
your starting banked number 100
times by 6%interest 100x.06 = 6 add that number to what number you have banked so 100+6= 106
you now hae 106 as your banked number (keep in mind your not adding any extra from your pocket)
okay compound they will not just add the 6% to that 100 again they willl add it to the 106 so lets do that!
106 x .06 interest = 6.36 that last intrest gave us and extra 36cents
so now our over all banked number is 112.36
what is 6% of that and continue... the higher the number the better off!
hope that helps
mainly you get the interest of last times interest!
2007-04-23 14:04:01 · answer #3 · answered by Anonymous · 1⤊ 0⤋
Have a Look at this
http://en.wikipedia.org/wiki/Compound_interest
2007-04-23 13:56:05 · answer #4 · answered by Me 3 · 2⤊ 0⤋
I agree with the above :D
2007-04-23 14:05:23 · answer #5 · answered by TripleEit 1 · 0⤊ 0⤋