Compound Intrest Formula Math

N number of periods.

Compound intrest formula math. A is the amount of money accumulated after n years including interest. Compound interest or interest on interest is calculated with the compound interest formula. Finds the future value where. Pv fv 1 r n.

The principal is the amount of money you deposit that you expect will grow over time. Fv pv 1 r n. Compound interest amount principal. I would choose option 1.

Compound interest formula is notation of terms in the above compound interest formula. Compound interest formula a simpler version of the compound interest formula is b p 1 r n where b is the final balance p is the principal r is the interest rate for 1 or each interest period and n is the number of payment periods. A p 1 r 5. To calculate compound interest we need to know the amount and principal.

The basic formula for compound interest is. To understand the compound interest we need to do its mathematical calculation. A p 1 r n. P is the principal or the amount of money invested deposited r is the rate of interest per annum compounded m times annually.

It is the difference between amount and principal. A p 1 r m m t 3500 1 0 015 4 4 2 3606 39. N is the number of years the amount is deposited or borrowed for. Fv future value pv present value r interest rate as a decimal value and.

When the interest is compounded once a year. There are other types of questions that can be answered using the compound interest formula. Where the amount is given by. A p 1 r n n t a 1 000 000 1 06 12 12 5 a 1 000 000 1 0 005 12 5 a 1 000 000 1 005 60 a 1 348 850 15.

However if you borrow for 5 years the formula will look like. The compound interest formula is given below. The formula for compound interest is p 1 r n nt 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.