Compund Interest Formula

[Dhillon]

What is the formula to calculate compound interest?

 

[Amrita]

The formula for calculating compound interest depends on several factors like the principal amount, interest rate, compounding frequency, and the time duration. The generic formula for computing compound interest is:

A = P (1 + r/n)^(nt)

Here,

• A represents the total amount (including principal and interest)
• P is the principal amount
• r is the annual interest rate (in decimal format)
• n denotes the number of times the interest is compounded per year
• t is the time duration (in years)

By using this formula, you can calculate the total amount you will receive at the end of the investment period.