R the interest rate decimal n the number of times that interest is compounded per period. When reading about personal finance topics such as compound interest investing you are bound to see the term rational investing being mentioned a few. Compound interest is the product of the initial principal amount by one plus the annual interest rate raised to the number of compounded periods minus one.
Calculate compound interest on an investment or savings.
P the principal investment amount. Compound interest is simply interest on interest But the best way to explain it is with an illustration that compares the different ways interest can be handled. Where n Number of years of investment. P the principal investment amount.