The compound interest formula is A P1rn to the power of nt Compounding Interest Pros and Cons. The Compound Interest Formula. N Number of Periods.
And by rearranging that formula see Compound Interest Formula Derivation we can find any value when we know the other three.
A P 1 r4 1004n A P 1 r 4 100 4 n While calculating the compound interest the rate of interest and each time period must be of the same duration. Finds the Future Value where. A simpler version of the compound interest formula is B P 1 r n where B is the final balance P is the principal r is the interest rate for 1 or each interest period and n is the number of payment periods. In comparing quantities we have a formula for calculating the value of compound interest.