Compound interest is the addition of interest to the principal sum of a loan or deposit or in other words interest on interest. 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. Putting these variables into the compound interest formula would show The second portion of the formula would be 112683 minus 1.
So the initial amount of the loan is then subtracted from the resulting value.
We created the above Calculator using JavaScript language. The formula for the annual equivalent compound interest rate is. Putting these variables into the compound interest formula would show The second portion of the formula would be 112683 minus 1. For example if I take a loan of 1000 1000 1 0 0 0 compounded annually such that the rate of interest is 10 10 1 0 then my interest for the first year would be 10 10 1 0 of 1000 1000 1 0 0 0 that is 100 100 1 0 0.