Periodic Compounding Rate Formula
Total amount, including principal P and compounded interest CI, is given by:
A = P[1 + (r/n)]nt
where,
- P = Principal
- A = Final Amount
- r = Annual Interest Rate
- n = Number of Times Interest is Compounding
- t = Time (in years)
Thus, compound interest is:
CI = A – P
Compound Interest Formula
Compound Interest is the interest that is calculated against a loan or deposit amount in which interest is calculated for the principal as well as the previous interest earned.
The common difference between compound and simple interest is that in compound interest, interest is calculated for the principal amount as well as for the previously earned interest whereas simple interest depends only on the principal invested.
Table of Content
- What is Compound Interest?
- Compound Interest Formula
- How to Calculate Compound Interest?
- Compound Interest Formula – Derivation
- Half-yearly Compound Interest Formula
- Quarterly Compound Interest formula
- Monthly Compound Interest Formula
- Daily Compound Interest Formula
- Periodic Compounding Rate Formula
- Rule of 72
- Compound Interest of Consecutive Years
- Continuous Compounding Interest Formula
- Some Other Applications of Compound Interest
- Difference between Compound Interest and Simple Interest
- Compound Interest Examples
- Compound Interest – Practice Questions