The compound interest rate is that which is calculated on a capital to which the interest previously generated is added, so that these in turn produce new interest.

The following formula is used to calculate compound interest:

**Vf= C (1+i)n**

In which:

Vf: Sum of the principal and interest to be paid.

C: Capital or amount of the loan.

i: Interest rate.

n: Number of periods in which compound interest is capitalized.

Related terms

Creditor | Capital | Debtor | Lender | Deposit | Mortgage | Mixed interest rate mortgage | Variable interest rate mortgage | Foreign currency mortgage | Reverse Mortgage | Subprime Mortgage | Interest | Simple interest | CPI | Loan | NIR | Interest rate | Active interest rate | Compound interest rate | Fixed interest rate | Passive interest rate | Variable interest rate