Compound Interest of Consecutive Years
If we have the same sum and the same rate of interest. The C.I. of a particular year is always more than C.I of Previous Year. (CI of 3rd year is greater than CI of 2nd year). Difference between CI for any two consecutive years is interest of one year on C.I of preceding year.
C.I of 3rd year – C.I of 2nd year = C.I of 2nd year × r × 1/100
Difference between amounts of any two consecutive years is the interest of one year on amount of preceding year.
Amount of 3rd year – Amount of 2nd year = Amount of 2nd year × r × 1/100
Key Results
When we have same sum and same rate,
C.I for nth year = C.I for (n – 1)th year + Interest for one year on C.I for (n – 1)th year
Compound Interest Formula
Compound Interest is the interest that is calculated against a loan or deposit amount in which interest is calculated for the principal as well as the previous interest earned.
The common difference between compound and simple interest is that in compound interest, interest is calculated for the principal amount as well as for the previously earned interest whereas simple interest depends only on the principal invested.
Table of Content
- What is Compound Interest?
- Compound Interest Formula
- How to Calculate Compound Interest?
- Compound Interest Formula – Derivation
- Half-yearly Compound Interest Formula
- Quarterly Compound Interest formula
- Monthly Compound Interest Formula
- Daily Compound Interest Formula
- Periodic Compounding Rate Formula
- Rule of 72
- Compound Interest of Consecutive Years
- Continuous Compounding Interest Formula
- Some Other Applications of Compound Interest
- Difference between Compound Interest and Simple Interest
- Compound Interest Examples
- Compound Interest – Practice Questions