A P 1 r m mt. This algebra precalculus video tutorial explains how to use the compound interest formula to solve investment word problems. Learn the Compound Interest Formula in this free math video by Marios Math Tutoring005 Formula for Calculating Compound Interest038 Example 1 5000 at 8.
The formula itself is as follows.
T number of years for which investment is done 3 years. R Annual Nominal Interest Rate in percent. Compound Interest is calculated on the initial payment and also on the interest of previous periods. After one year you will have 100 10 110 and after two years you will have 110 10 121.