Compound Interest Formula

compound interest formula  This algebra & precalculus video tutorial explains how to use the compound interest formula to Key Takeaways · Compound interest is the interest computed on the sum of the initial investment amount and its accumulated interests · The

With compound interest the amount you are calculating interest on, changes every year The interest is calculated for the first year and is then added on to the The simple interest formula is linear: I = P r n I=Prn I=Prn while the compound interest formula is non-linear: A = P n A=P^{n} A=Pn in

To calculate monthly compound interest, use the formula A = P^, where A is the final amount, P is the principal, r is the annual However, it is much more useful in most cases to use the simplified formula B=P because it leads to the formula for a much more common