Compound Interest Rate


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Compound Interest Rate

The interest rate on a loan or other fixed-income instrument in which interest previously paid is included in the calculation of future interest. For example, if one has a certificate of deposit for $1,000 with a 3% compound interest rate (compounded monthly), the interest paid is $30 (3% of $1,000) in the first month, $30.90 (3% of $1,030) in the second month, and so forth. The more frequently interest is compounded, the higher the yield will be on the instrument.
References in periodicals archive ?
Anyone who had invested PS1m in 1979 hoping to turn it into PS100m by 2013, would have had to have found a bank offering an amazing continuous compound interest rate of more than 40 per cent.
Students from Year 9 onwards (Board of Studies, 2007) are familiar with the concept of a compound interest rate.
56 percent and the average compound interest rate was 10.