Understanding Compounding Interest
Understanding Compounding Interest You’ve heard about compounding interest and maybe think you know what it is. But do you really know how fast it grows? At its simplest, it means that over time, interest is added to the previous balance, increasing the balance and in the next period, interest is calculated on this new, higher balance and is therefore greater than the period before. How is compounded interest calculated? Write down a figure of $1000 and calculate how much you’d owe
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