General · Unit 4 · compound interest

Each period multiplies the balance

Compound interest is the recurrence An+1 = R An — interest flies onto the same pile, period after period.

Term deposit · no cashflow Period 0
+interest
Interest earned
$0
Balance
nOpeningInterestClosing

Closed form An = A₀ Rn matches the ledger after a jump.

Deposit settings

$10k
5%
4
5y

This period

Time

n0

Working