An easy and straightforward way to calculate the amount earned with an annual compound interest is using the formula to increase a number by percentage. Ending Investment Start Amount 1 Interest Rate n. Generally when someone deposits money in the bank the bank pays interest to the investor in quarterly interest.
So the formula for an ending investment is given by.
Initial investment 1 annual interest rate365 years 365. After using this formula the simple interest earned would be 120. If the account was compounded daily the amount earned would be higher. We provide a calculator which allows you to compare compounding frequencies side-by-side.
