Whether it is interest you will earn or interest you will pay compound interest can be calculated using the following formula. The formula for the Compound Interest is CompoundInterestP1fracrnnt-P This is the total compound interest which is just the interest generated minus the principal amount. The principal is the amount of money you deposit that you expect will grow over time.
Where the amount is given by.
The compound interest formula is A P1rn to the power of nt Compounding Interest Pros and Cons. N Number of Periods. Rate and Period in Compound Interest Formula. For example if an account is compounded monthly then one month would be one period.