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whats the formula for compound interest. 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. For example lets say that you have 1000 to invest for three years at a 5 percent compound interest rate.
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Compound interest formula 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. For monthly compounded to calculate the interest which is compounded all month in the whole year. Your 1000 would grow to be 115762 after three years.
Compound Interest P 1 r t P where.
To calculate compound interest use the formula below. R Rate of interest. Simple Interest is a method for calculating the interest earned or paid on a certain balance in a specific period. The formula used to calculate standard compound interest including the principal is as follows.
