Farm Management Term Deposits
Compound Interest ExplainedCompound Interest ExplainedClose
Interest earned on an initial amount of money invested as well as on the accumulated interest. Interest can be compounded at different frequencies such as monthly, semi-annually, annually etc. The compound frequency, the number of compounding periods and the interest rate will determine the amount of interest earned.
Example: If you invest $10,000 for 5 years, at 3% interest compounded monthly, you would earn $1,616. Then by adding it to the initial investment amount, you would have a total of $11,616 by the end of the 5 year term.