Asked by Haneen Hmedat on May 30, 2024
Verified
What is meant by the term compound interest?
Compound Interest
Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.
- Identify the differences between real and nominal interest rates, in addition to comprehending the notion of compound interest.
Verified Answer
YS
Yeshi SeldonJun 02, 2024
Final Answer :
Compound interest is the accumulation of money that builds over time in an investment or interest-bearing account as new interest is earned on previous interest that is not withdrawn. It is the total interest that accumulates over time on money in an interest-bearing account; compound interest builds and builds over time.
Learning Objectives
- Identify the differences between real and nominal interest rates, in addition to comprehending the notion of compound interest.