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how to derive compound interest formula. The compound interest formula is given below. It is the difference between amount and principal.
Compound Interest Derivations from www.mathsisfun.com
It is the difference between amount and principal. At P 1 nr. To calculate compound interest we need to know the amount and principal.
If the interest is compounded annually the formula of amount is given by.
At P 1 nr. In this video tutorial the instructor shows how to derive the formula to compute interest compounded annually. This is compound interest because you are earning interest on interest. Start with the formula for compound interest shown below.
