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compound interest rate formula with example. The compound interest formula is P 1in - P where P is the principal i is the annual interest rate and n is the number of periods. You arrive at this by applying the formula.
Your interest expense for the first six months is 3000 100000 6 12. The formula for compound interest is P 1 rn nt where P is the. After one month your investment has added 1167 in interest.
The formula for compound interest is P 1 rn nt where P is the.
The calculation of simple interest is equal to the principal amount multiplied by the interest rate multiplied by the. Lets assume Alex invests 100000 in a high-yield saving account with an interest rate of 3 compounded quarterly. General compound interest takes into account interest earned over some previous interval of time. We can also reduce the formula of compound interest of yearly compounded for quarterly as given below.