Interest always calculated on the original amount, without reinvesting it.
I = C × r × n
What each letter means
- C: Principal
- r: Annual rate
- n: Years
An example
With C = €10,000, r = 5%, n = 3 years: Interest = €1,500.
Interest always calculated on the original amount, without reinvesting it.
With C = €10,000, r = 5%, n = 3 years: Interest = €1,500.