Investment Fundamentals

Compound Interest

Definition

What is Compound Interest?

Interest calculated on principal plus previously accumulated interest.

Example in practice

At 10% compounded annually, ₦100,000 earns ₦10,000 in year one and ₦11,000 in year two.

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The original amount of money invested or lent, excluding later returns.

Money or other resources committed to produce income, growth, or another economic benefit.

An asset or commitment of money made with the expectation of future income, growth, or both.

Anything with economic value that can be owned or controlled.

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