A P1 rnnt If you want to try to see whats going on behind the scenes in our calculator heres how to do the math yourself using the compound interest formula. I nominal annual interest rate in n number of compounding periods. 5 Round to the nearest cent as needed The amount of interest earned is.
It is the result of reinvesting interest rather than paying it out so that interest in the next period is then earned on the principal sum plus previously accumulated interest.
The formula for the compound interest CI is as. A P1 rnnt If you want to try to see whats going on behind the scenes in our calculator heres how to do the math yourself using the compound interest formula. Where A is the ending amount P is the beginning amount or principal r is the interest rate expressed as a decimal n is the number of compoundings a year and t is the total number of years. Simple Interest and Compound Interest Simple Interest.