Simple vs Compound Interest: Definition and Formulas

compound interest formula  The formula for compound interest is A=Pnt, where A represents the final balance after the interest has been calculated for the time, t, Compound interest, or 'interest on interest', is calculated using the compound interest formula A = P*^ , where P is the principal

Compound interest is interest that is calculated on the principal amount *together with* accumulated interest---it includes interest on Make additions at start end of each compounding period Results Future Value: $ Compound Interest Formula Compound interest

The simple interest formula is linear: I = P r n I=Prn I=Prn while the compound interest formula is non-linear: A = P n A=P^{n} A=Pn in As explained earlier, the future value of money after n period with an interest rate of i can be calculated using the Equation 1-1: F=Pn which can also be