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what is the equation for compound interest. The formula for compound interest is P 1 rnnt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded. How to Calculate Compound Interest.
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The formula for compound interest is P 1 rnnt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded. The compound interest formula is as follows. 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.
Any time you run calculations examine a few what-if scenarios using different numbers and see what would happen if you save a little more or earn interest for a.
The formula for compound interest is Compound Interest CI Principal 1Rate100n - Principal where P is equal to Principal R is equal to Rate of Interest T is. How Compound Interest Benefits Savings and Investments. How to Calculate Compound Interest. Once the compound amount has been computed the amount of interest earned over the investment period can be computed by subtracting principal amount from the compound amount.
