Calculate rate of interest in decimal solve for r r nAP 1nt - 1. The bank gives you a 6 interest rate and compounds the interest each month. To find the value of i first convert the rate of interest in to decimal form.
A final amount P principal r interest rate or T how many years to compound.
Compounding occurs once per period in this basic compounding equation but other calculators allow compounding more than once per period utilizing A P 1 rnnt. We can calculate the compound interest using the compound interest formula which is an exponential function of the variables time t principal P APR r and number of compounding periods in a year n. A final amount P principal r interest rate or T how many years to compound. Lets solve a few compound interest problems.