1.3 Compound Interest

 
Compound Interest
 
Interest=(principal)(number of periods)(interest rate)
 
Example
 
If you borrow $2,500 for 4 years at 15%-per year simple interest
 
Interest per year = 2,500(0.15)=$375
Total interest = 2,500(4)(0.15)=$1,500
 
The amount after due is 2,500+1,500=$4,000