The important concept which helps in understanding the compounding interest.

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Answer 1

Question

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.

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Answer 2

Question

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.

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Answer 3

Question

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.

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Answer 4

Question

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.

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Answer 5

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.

Answer 6

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.

Answer 7

Chapter 3, Problem 1Q

Summary Introduction

To explain: The important concept which helps in understanding the compounding interest.

Answer 8

Expert Solution & Answer

Explanation of Solution

“Earning further interest on reinvested interest earnings” is the important concept which helps in understanding the compounding interest. If the accumulated interest or the amount which is earned on a particular principle value is reinvested rather than the paid off, then in the next year they are able to earn interest on both the amounts that is principal amount and the interest which is reinvested. Therefore, this process is known as the compounding.