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how to calculate compound interest math. P is the principal the initial amount you borrow or deposit r is the annual rate of interest percentage n is the number of years the amount is deposited or borrowed for. Calculate the Interest Loan at Start Interest Rate Add the Interest to the Loan at Start to get the Loan at End of the year The Loan at End of the year is the Loan at Start of the next year.
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Calculate the Interest Loan at Start Interest Rate Add the Interest to the Loan at Start to get the Loan at End of the year The Loan at End of the year is the Loan at Start of the next year. Since interest is compounded half-yearly the principal amount will change at the end of first 6 months. After one year you will have 100 10 110 and after two years you will have 110 10 121.
I ended up getting the right answer using excel.
To calculate interest we first multiply the principal by the annual rate of interest. The interest for the next six months will be calculated on the amount remaining after the first six months. Since interest is compounded half-yearly the principal amount will change at the end of first 6 months. P is the principal the initial amount you borrow or deposit r is the annual rate of interest percentage n is the number of years the amount is deposited or borrowed for.
