Compound interest simply means that the principal generates income, your principal continues to generate income, and the income continues to generate income. For example, the net value of your fund is 1, and you bought 1 10,000 yuan. In the second year, the net fund value increased from 10% to 1. 1, and your 1 ten thousand yuan became 1. 1. In the third year, the net fund value increased from 10% to 1, and yours was 1. What if it's simple interest? Because your principal is only 10000 yuan, the annual income in the third year is still only 1000 yuan, and your principal and income will become1200,000 yuan in the third year, which is different from compound interest 1000 yuan. Your income can also generate income for you. This is called compound interest, which has been reflected in your net assets. Pure theory, some friends may be puzzled. Take China Merchants Zhongzheng Liquor as an example: 20 19, with an increase of 57.08 in the first quarter, 10.59% in the second quarter, 4.53% in the third quarter and 2.89% in the fourth quarter. If calculated by pure profit, it is 57.08%.

Calculation method of fund compound interest income Fund investment generally reinvests the accumulated income as capital, while the fixed investment of the fund generally reinvests the dividend to realize rolling interest calculation, so that investors can enjoy the effect of compound interest and appreciation.

According to the fixed investment formula of the fund, when the expected annual rate of return is 15%, if you invest in 500 yuan to participate in the fixed investment of the fund for 360 months every month, you can realize the income of 3.46 million yuan after the expiration. If you deposit your money in the bank, if you calculate according to the previous one-year fixed interest rate of 3.87%, you can realize a profit of 339,000 yuan after the same conditions expire, and the difference between them is more than 10 times (all the funds will be renewed every time they expire). The main reasons for the difference are the yield difference of 65,438+065,438+0.13% and the continuous compound interest effect.