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what is the formula for compound interest compounded annually. The formula for interest compounded annually is FV P1rn where P is the principal or the amount deposited r is the annual interest rate and n is the number of years the money is in the bank. 5 Round to the nearest cent as needed The amount of interest earned is.
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Compound interest is the addition of interest to the principal sum of a loan or deposit or we can say interest on interest. For years at compounded 4500 5 37 monthly The total amount accumulated after years is. Gross figure x 1 interest rate per period.
Compound Interest Formula P principal amount the initial amount you borrow or deposit r annual rate of interest as a decimal t number of years the amount is deposited or borrowed for.
Example of Compound Interest Formula. The formula for compound interest is P 1 rn nt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded per time period and t is the number of time periods. In this case B2 is the Principal and A2 is the Interest Rate per Period. R the annual interest rate expressed in decimal form decimal 100.
