General compound interest takes into account interest earned over some previous interval of time. Compounding simply means that an investment is growing with accumulated interest and earning interest on previously accrued interest that becomes part of the total investment pool. The formula you would use to calculate the total interest if it is compounded is P1in-1.
Add the nominal interest rate in decimal form to 1.
Divide your annual interest rate by two to find the semiannual interest rate. Where CI Compounded interest. FV PV 1r n. The formula you would use to calculate the total interest if it is compounded is P1in-1.