How to use the compound interest formula. Compounded annual growth rate ie CAGR is used mostly for financial applications where single growth for a period needs to be calculated. An original loan balance of 15000 divided by 60 is 250 a month.
In the formula A represents the final amount in the account after t years compounded n times at interest rate r with starting amount p.
Basically the two major criteria to setting interest rates are the riskiness of the investment and what rate is commonly. With interest that compounds every day you would have about 222534. Compound interest is when a bank pays interest on both the principal the original amount of moneyand the interest an account has already earned. How to calculate compound interest.