Compound Interest Formula and Examples

Compound Interest Formula

Compound Interest Formula A = P (1 + r/n)^(nt)
and compound interest calculator, compound interest formula in excel and many more examples.

  1. A = the future value of the investment/loan, including interest
  2. P = the principal investment amount (the initial deposit or loan amount)
  3. r = the annual interest rate (decimal)
  4. n = the number of times that interest is compounded per unit t
  5. t = the time the money is invested or borrowed for

Example

Principal amount of $6,000 is deposited into a savings account at an annual interest rate of 5%, compounded monthly, calculate the value of the investment after 10 years

P = 6000
r = 5/100 = 0.05 (decimal)
n = 12
t = 10
If we plug those figures into the Compound Interest Formula , we get the following:

A = 6000 (1 + 0.05 / 12) ^ (12 * 10) = 9882.054
So, the investment balance after 10 years is $8,235.05.

Compound Interest Formula

Overview of Compound interest formula

The compound interest formula calculator is a very relevant idea that allows you to realize where and how you handle your money and can also allow you to get a greater return on investment and savings. When interest is attached to the total gain of an asset, it, therefore, represents a compound interest, such that the general interest is attached to the capital number.

You can figure out just how often the compound interest will indeed be gained on your savings using this compound interest calculator, you can also use SIP calculator to find your returns on investments. You can measure the compound interest monthly, half-yearly, quarterly with this compound interest calculator , or though you prefer to calculate compound interest on one particular day. It plays a major role for an interest compound calculator that is interpreted and used by you as helpful and helpful by way of a compound interest calculator.

In today’s generation, we use a calculator for any sort of calculation because we had made ourselves very oriented on the outcome which should be more than 100 percent accurate, but manually it may not be as feasible or accurate as of the calculator. In making big predictions in seconds, calculators play a major role.

For example: Assume you make a 4-year investment of $40000 in a fixed deposit and a 10% (percent) interest rate so you will get about $4000 during the first year.

The major relief because of calculators is that we don't have to do compound interest manually because that can take a long time. In the following article, you can learn about the interest for compounds and how you can calculate the interest for compounds within seconds with the use of our calculator.


Disclaimer

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