The formula for compound interest is P 1 rnnt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded per time period and t is the number of time periods. A P1 rnnt If you want to try to see whats going on behind the scenes in our calculator heres how to do the math yourself using the compound interest formula. The formula now becomes.
Compound interest is the product of the initial principal amount by one plus the annual interest rate raised to the number of compounded periods minus one.
The formula used in the compound interest calculator is A P 1rnnt A the future value of the investment P the principal investment amount r the interest rate decimal. The compound interest can be calculated such as. The formula for compound interest is P 1 rnnt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded per time period and t is the number of time periods. Formula of Continuous Compounding.