Compound interest is the interest that is accrued on both the initial investment amount and the reinvested interest of previous periods.
Suppose someone put 100,000 rubles in the bank at 8% per annum. In a year, the income will be 8,000 rubles. If you take away the income, next year you can get the same 8,000 rubles. However, if you do not take income,% will be accrued already on 108,000 rubles, and then next year's income will be 8,640 rubles. This is compound interest.
Unlike simple interest, which is charged every time on the same initial amount, compound interest is regularly recalculated: the initial amount is added to income for a certain period, and then % is accrued on the increased amount of investments.
The more time passes, the more noticeable the effect of compound interest.
Aghasi Khanjyan street, 50, Yerevan, Armenia, 0025
Marr street, 16, apt. 5, Yerevan, Armenia, 0079
Loutrakiou, 5, CHARA VENEZIA BUILDING, 1st floor, Office 101, Nicosia, Cyprus, 2027
Zolotukhin & Partners corporation LTD
LLC "Ranks AAA" does not provide brokerage services and does not take funds into trust management.
Legal Entity Code:53125283 Insurer code: 43715106 registered in Ministry of Justice Republic of Armenia.
© «RANKS» 2022. All rights reserved