renteoprente

Rente op rente, often written rente-op-rente and known as compound interest in English, is a financial concept in which interest earned on an initial principal is added to the principal. This increases the balance on which future interest is calculated, so interest accumulates on previously earned interest as well as on the original amount. It differs from simple interest, where interest is computed only on the initial principal.

The standard formula for compound interest is A = P (1 + r/n)^(n t). Here P is the starting amount, r is the annual nominal interest rate, n is the number of compounding periods per year, and t is the number of years. More frequent compounding (higher n) generally produces a higher final amount, because interest is applied more often to a growing balance.

Examples help illustrate the effect. With P = 1000 euros, r = 0.05, n = 1, t = 3, the final amount A is 1000 × (1.05)^3 ≈ 1157.63 euros. If the same starting sum is compounded monthly (n = 12) for 5 years (t = 5), A is approximately 1000 × (1 + 0.05/12)^(60) ≈ 1283 euros. By contrast, simple interest over 3 years would yield A = 1000 × (1 + 0.05 × 3) = 1150 euros.

Rente op rente applies to savings accounts, retirement funds, loans, and many financial products. Its impact grows with higher rates, longer time horizons, and more frequent compounding. Fees, taxes, and withdrawal rules can affect the net value of compounding.