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what is the formula of compound interest quarterly. The formula for calculating compound interest is. A P 1 R44nand CI.
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The formula for calculating compound interest is. 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. If the interest on your investment is paid quarterly while being quoted as an annual interest rate the Excel compound interest formula becomes.
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.
When solving quarterly you compound your interest four times yearly. Here the principal amount number of periods rate of interest would be required. A P 1 r m mt In the present case A Future Value of the investment is to be calculated. The only modification is the rate of interest would be raised to n4 which is static since we are supposed to calculate interest quarterly.
