What is compound interest?
IN THIS LESSON
- Earned interest is defined as the amount of money earned over a specific period from investments that pay you a regular mandated payment series.
- Simple interest is interest calculated only on the principal amount.
- Compound interest is interest calculated on the principal amount and the interest it accrues.
- Interest can compound at various frequencies or periods with compound interest. The frequency could be yearly, every six months, quarterly, monthly, weekly, or daily.