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THAT THIS POWERPOINT

IS MADE BY POWER
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V.365, EXPECT SOME
ERRORS OR UN
FUNCTIONAL EFFECTS IF
OPENED IN NOT
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THANK YOU!
MATHEMATICS
COMPOUND
INTEREST
SUBMITTED TO:
MS. SHIN DELAROSA
WHAT IS COMPOUND INTEREST?

• Compound interest is the

interest on savings calculated
on both the initial principal
and the accumulated interest
from previous periods.
WHAT IS COMPOUND INTEREST?

• "Interest on interest," or the

power of compound interest, is
believed to have originated in
17th-century Italy. It will make
a sum grow faster than simple
interest, which is calculated
only on the principal amount.
WHAT IS COMPOUND INTEREST?

• Compounding multiplies money

at an accelerated rate and the
greater the number of
compounding periods, the
greater the compound interest
will be.
KEY TAKEAWAYS!
Compound interest is interest
calculated on the initial principal,
which also includes all of the
accumulated interest from previous
periods.

Generating "interest on interest" is known as the

power of compound interest.
KEY TAKEAWAYS!
Interest can be compounded on any
given frequency schedule, from
continuous to daily to annually

Compounding multiplies money at an accelerated

rate.
HOW DOES COMPOUND
INTEREST WORKS?
Compound interest is calculated by multiplying the
initial principal amount by one plus the annual
interest rate raised to the number of compound
periods minus one. The total initial amount of the
loan is then subtracted from the resulting value.