Compound interest formula: s = p( 1+I)n, that is, the sum of principal and interest = principal ×( 1+ interest rate )× number of periods "is the key factor of the whole formula. If you multiply it year after year (or January), this value will of course get bigger and bigger. The calculation of compound interest is to calculate the principal and the generated interest together, that is, it is profitable.
Related information introduction:
Compound interest is compound interest, which means that the annual income can also generate income, which is also commonly known as rolling interest. The calculation of compound interest is to calculate the principal and the generated interest together, that is, it is profitable. The characteristic of compound interest calculation is that the sum of the principal and interest at the end of the previous period is taken as the principal of the next period, and the amount of the principal of each period is different when calculating.
Compound interest means that after each interest period, the generated interest should be added to the principal to calculate the interest of the next period. In this way, in each interest-bearing period, the interest of the previous interest-bearing period will become the principal of interest-bearing, that is, interest will accrue at interest, which is also commonly known as "rolling interest".