Compound interest is based on the amount of the principal of a loan or deposit and interest rate which accrues in conjunction with how often the loan compounds. A High School Math Refresher. In the simplest terms its interest on interest.
Semiannually quarterly monthly daily or any other period defined by the financial institution.
A P 1 R44nand CI. In the formula A represents the final amount in the account after t years compounded n times at interest rate r with starting. To calculate compound interest use the formula below. Monthly Compound Interest Formula.