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what is the equation for interest compounded monthly. The formula used for finding compound interest is. P the principal investment amount.
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For monthly compounded to calculate the interest which is compounded all month in the whole year. N Number of compounding periods per year. A is the future value of investmentloan including interest earned P is the the principal investment or loan amount.
Initial investment 1 annual interest rate12 years 12.
Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one. Compound interest is an interest of interest to the principal sum of a loan or deposit. In order to calculate the value of an investment after the period of 5 years compound interest formula monthly will be used. Tax CreditsCC-BY-20 The formula for interest compounded annually is FV P 1rn where P is the principal or the amount deposited r is the annual interest rate and n is the number of years the money is in the bank.
