Compound Interest
In
case of compound interest, the interest is calculated after every unit of time,
called term and is added to the previous sum. The unit of time or term may be
yearly or half yearly or quarterly or monthly as settled between the lender and
the borrower. In such cases, the amount after first unit of time becomes the
principal for the second unit of time, the amount after second unit becomes the
principal for the third unit of time and so on. After a certain period the
difference between the amount and the money borrowed is called the compound
interest (C.I.) for that period of time.
0 Comments