Add 1 to this to account for the effects of compounding. A P 1 rn nt A value after t periods. A is the total amount of money including interest after n years.
A relatively straightforward mathematical formula can be used to calculate the total sum of compound interest that will be paid on a mortgage loan.
You may wish to read Introduction to Interest first. The formula for compound interest including principal sum is. Calculate the interest on borrowing 40 for 3 years if the simple interest rate is 5 per year. R annual interest rate.