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🔑 Key Concepts of Compound Interest - Definition: Compound interest is calculated on both the original principal and the accumulated interest from previous periods. - Formula: A=Pcdot (1 i)^n- A = final amount - P = principal (initial investment) - i = interest rate per compounding period - n = number of compounding periods - Difference from Simple Interest: - Simple interest only applies to the principal. - Compound interest applies to the principal plus prior interest, accelerating growth. 📊
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