Model 4: Year-wise and nth-Year Interest

04 Try it yourself Interactive

One year’s interest, isolated

Choose a principal, a rate and a year number. The console shows the balance at the start of that year, takes a single year’s interest on it, and then compares with the previous year so you can see the geometric ratio. Step through years 1 to 4 on the same principal and watch the interests grow by a constant factor.

₹10,000 at 10%, third year

base 12,100 · interest 1,210

The exponent used is always one less than the year number. Year 1 uses the principal itself, which is why year 1 interest equals simple interest.

Press Next to work through it one step at a time.

Year–

Balance at start–

Interest–

Rise on last yr–

step 0 / 0