Compound Interest: What It Is, Formula, Examples

compound interest formula  To calculate compound interest in Excel, you can use the FV function This example assumes that $1000 is invested for 10 years at an annual interest rate of Compound interest is interest that is calculated on the principal amount *together with* accumulated interest---it includes interest on

The formula for compound interest is A=Pnt, where A represents the final balance after the interest has been calculated for the time, t, Step 1: After the first year, the interest in Abena's CD is computed using the interest formula I = P × r × t I = P × r × t The principal is P

Using the formula for simple interest, we can develop a similar formula for compound interest With an opening balance P and an interest rate of i, the Compound interest is taken from the initial – or principal