Compound interest formula
P = the principal (the initial amount)
r= annual
interest rate (
expressed
as a decimal)
expressed
as a decimal)
annual
interest rate (
expressed
as a decimal)
n=
number of
interest periods
per year
(see the
table below
for more information)
t=
number of years
P is invested
A=amount after t
years
If investment interest rate is
compounded monthly
, then n = 12
If investment interest rate is
compounded quarterly
, then n = 4
If investment interest rate is
compounded semi-annually
, then n = 2
If investment interest rate is
compounded annually
, then n = 1
