Compound Interest

Compound interest is the interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, compound interest allows money to grow at an accelerating rate over time.

Example

If you invest $10,000$ TZS at an annual compound interest rate of $5\%$ for $2$ years, the final amount $A$ is given by $A = 10000(1 + \frac{5}{100})^2 = 11025$ TZS.

See Also

• Simple Interest
• Principal
• Percentage