Simple Interest And Compound Interest Formula In Maths Complete Guide

A P 1 i n Where. Lets see one simple example to understand the concept of simple interest. Let us see some simple interest examples using the simple interest formula in maths.

P the principal investment amount the initial deposit or loan amount R the annual interest rate decimal n the number of times that interest is compounded per year.

A accumulated amount P principal amount i interest written as a decimal n number of years. To calculate compound interest work out the interest for the first period add it on and then calculate the interest for the next period etc. Calculating Compound Interest If you deposit 1000 in a bank account which is paying 3 compound interest per year. To determine the future cost we use the compound interest formula.