This example demonstrates how the formula for compound interest can be used to derive the power series definition of the exponential function. General Compound Interest Principal 1 Annual Interest RateN NTime. N Number of Periods.
N Number of Periods.
Simple interest is calculated using the formula I P x T x R 100. N number of times interest is compounded per year. Opting to reinvest dividends derived from the. This is compound interest because you are earning interest on interest.