Compound interest
When a deposit is made for several years and rates are included to the capital, the rate is calculated with compound interest:
where
C = capital
C(n) = increased capital
n = number of interest time, e.g. years
q = rate factor
Example 1.
A person deposits 2100€ for an account for 6 years. Interest rate is 2.1% p.a. How much money is in the account at the end, if no money is withdrawn during the deposit time?
C = 2100€
n = 6
i = 2.1% p.a.
q= =1.021