The calculation formula of compound interest is the calculation of interest in the previous period, which is included in the repeated interest calculation of principal, that is, "interest generates interest" and "interest rolls over". There are two main calculation methods: one is to calculate compound interest at one time; The other is the calculation of equal multiple payment of compound interest.
Its characteristic 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 amount of the principal of each period is different when calculating. It is mainly used to calculate the final value of principal and interest of multiple equal investments and the value of multiple equal payments.
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 the principal and interest of compound interest is: f = p (1+I) n.
The calculation of compound interest can be divided into intermittent compound interest and continuous compound interest The method of calculating compound interest on schedule (such as year, half year, quarter, month or day) is intermittent compound interest; The calculation method of instant compound interest is continuous compound interest. In practical application, the calculation method of discontinuous compound interest is generally adopted.
The present value of compound interest refers to the principal that must be invested 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.