CLASS 10 · LEARNING KNOWLEDGE
Compound Interest and Financial Models
How it works
With annual compound interest, the entire capital is multiplied by the interest factor each year. Equal annual depreciation is also modeled with a constant factor. Percentage changes are not simply added.
Note
K_n=K₀·(1+p/100)^n; Depreciation: W_n=W₀·(1−p/100)^n.
K_n=K₀·(1+p/100)^n; Depreciation: W_n=W₀·(1−p/100)^n.
An example
A capital of 13400 € is annually compounded at 5 %. Calculate the final capital after 4 years with annual compound interest. Round to two decimal places. Give the result in €.
Factor q=1+5/100. K_n=13400·q^4. Round to cents only at the end. Result: 16287.78 €.
Try it yourself now
50 Exercises · three difficulty levels · selection and number input
To the learning unit →Own explanation and own practice exercises by AmyMath. Subject reference framework: KMK Educational Standards Mathematics ESA/MSA. The topic assignment may vary by federal state.