After the interest is returned to the principal, it will be settled at half the annual interest rate after half a year.

Compound interest four times in two years.

The algorithm formula is

65438+ million * (1+6%/2) * (1+6%/2) * (1+6%/2) * (1+6%/2)

= 65438+ million * (1+6%/2) 4

= 65438+ million * 1. 1255088

= 1 12550.88 yuan

Compound interest is a method of calculating interest. According to this method, the interest will be calculated according to the principal, and the newly obtained interest can also be calculated, so it is commonly called "rolling interest", "snowballing usury" or "overlapping interest". As long as the period of calculating interest is closer, the wealth will grow faster, and the compound interest effect will be more obvious with the longer the term.

Compound interest is an economic concept corresponding to simple interest. The calculation of simple interest does not need to include interest in the principal. Compound interest is just the opposite, and its interest should be incorporated into the principal for repeated interest calculation.

Compound interest is compound interest, which means that the annual income can also generate income. Specifically, the whole loan period is divided into several sections. The interest calculated according to the principal in the previous section should be added to the principal to form an increased principal, which will be used as the principal basis for calculating the interest in the next section until the interest in each section is calculated. After summing up, the interest of the whole loan period is obtained, which is simply compound interest. Einstein called it "the eighth wonder of the world".

The calculation of compound interest is to calculate the principal and the generated interest together, which 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 principal amount of each period is different when calculating. The formula for calculating compound interest is:

The present value of compound interest refers to the principal that must be invested now in order to reach a certain amount of funds in the future under the condition of calculating compound interest. The so-called compound interest, also called rolling interest in Galilee, refers to the method of making a new round of investment with interest after a deposit or investment is rewarded.

The final value of compound interest refers to the sum of the principal plus interest, after receiving the interest within the agreed period, and then calculating the interest and rolling it to the agreed period. Simply put, it is to deposit a at the beginning, take I as the interest rate, and deposit the sum of principal and interest after n periods. Formula: f = a * (1+I) n.

For example, if the principal is 50,000 yuan, the interest rate or investment return rate is 3%, and the investment period is 30 years, the interest income obtained after 30 years will be calculated according to the compound interest formula, and the sum of principal and interest (final value) will be 50,000× (65,438+0+3%) 30.

Because the inflation rate and interest rate are closely related, just like the two sides of a coin, the formula for calculating the final compound interest value can also be used to calculate the actual value of a specific fund in different years. Just change the interest rate in the formula into the inflation rate.