Fiducia TogetherCompound interest
Interest paid on interest. The same maths as depreciation and population growth.
Please note: This page explains a word or a process in education. It is general information about the system, the law and the guidance in England — not advice about your child, your school or your exam. If a decision is going against you, get advice from one of the free services we link to before you agree to anything or miss a deadline. If you are revising, check your own exam board's specification: boards word things differently and yours is the one that marks you.
What it is
Compound interest is calculated on the original amount plus the interest already added, so the amount grows by a multiplier each period: final = initial × (multiplier)ⁿ.
Where it applies
Both tiers, and it is the maths behind savings, loans, depreciation and growth or decay in science.
How it works
Simple interest pays on the original only and grows linearly. Compound grows exponentially, and over long periods the difference is large.
Depreciation is the same formula with a multiplier below 1.
How to use it in your work
Use the multiplier form rather than year-by-year addition — it is faster and less error-prone.
Read whether the question wants the total amount or just the interest earned. They differ by the original sum and the question always specifies.
Where to get help
Your teacher, your board's specification for what is on your paper, and Bitesize for worked examples. The maths song runs the topics in order.
Revise this with a song
These are ours. We write revision songs because a lot of people remember a tune when they cannot remember a page, and because revising out loud in the kitchen beats staring at a highlighter.
- The Maths Song The GCSE maths topics, in order.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains a word or a process in education. It is general information about the system, the law and the guidance in England — not advice about your child, your school or your exam. If a decision is going against you, get advice from one of the free services we link to before you agree to anything or miss a deadline. If you are revising, check your own exam board's specification: boards word things differently and yours is the one that marks you.