What is the compound interest formula?

[Sonu]

Can someone explain how the compound interest formula works and when it’s best applied? I’m trying to understand how interest grows over time, especially for savings accounts or long-term investments. Examples with yearly, monthly, or daily compounding would really help make it clearer.

 

[Dylan]

The compound interest formula is: A = P(1 + r/n)nt, where A is the future value, P is the principal, r is the annual rate, n is compounding frequency, and t is the time in years.

 

[Parbaublog]

The compound interest formula is:

A = P(1 + r/n)nt

Where:
A = total amount after interest

• P = principal (starting amount)
• r = annual interest rate (decimal)
• n = number of times interest is compounded per year
• t = time in years

 

[jainnorton]

The compound interest formula is A = P(1 + (r/n))nt where A = total amunt after interest, P = principal, r = annual interest rate, n = Number of times interest, t = time in years.

 

[Peter]

The compound interest formula is A = P (1 + r/n)^(n × t), which helps calculate how money grows over time. Here, P is the starting amount, r is the annual interest rate, n is how many times interest is added per year, and t is the number of years. This formula shows how investing or saving with compound interest increases your total amount because interest is earned on both the original amount and the interest already added.

 

[rajat]

The formula of finding the compound interest is: A = P (1 + r/n)^(n × t),

Where:

A = sum of interest and principal.

P = principal (initial amount)

r = interest rate (annual) (in decimals)

T = number of periods per year that the project is being evaluated over.

t = time in years