Investment Fundamentals
Compound Interest
Definition
What is Compound Interest?
Interest calculated on principalThe original amount of money invested or lent, excluding later returns. plus previously accumulated interest.
Example in practice
How This Looks in Practice
At 10% compounded annually, ₦100,000 earns ₦10,000 in year one and ₦11,000 in year two.
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Related Terms
Investment Fundamentals
Principal
The original amount of money invested or lent, excluding later returns.
Investment FundamentalsCapital
Money or other resources committed to produce income, growth, or another economic benefit.
Investment FundamentalsInvestment
An asset or commitment of money made with the expectation of future income, growth, or both.
Asset ClassesAsset
Anything with economic value that can be owned or controlled.