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how to calculate net compound interest. As with the other formula the rate per period and number of periods must match how often the account is compounded. P the principal investment amount.
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Using the prior example this formula would return an ending balance of 112683. If in the above scenario the compounding period is every year then the compound interest will be Compound Interest P 1 rn nt P. Formula to calculate compound interest.
Simple interest is seldom ever used in real world applications of interest.
Determining a single interest payment is as simple as multiplying the interest rate with the principal. T time number of years. Create an Excel document to compute compound interest. Compound interest can be computed by multiplying the existing principal sum by one plus the annual interest rate raised by the number of compound periods minus one.
