Formula of compound interest: Calculate compound interest on

Calculate compound interest on an investment, 401K or savings account with annual, quarterly, daily or continuous compounding. The calculator computes compound interest calculations and shows you the steps including the math. Compound interest refers to interest that is calculated on both the principal amount and the accumulated interest over a specified time period. Students can review the Compound Interest Formula for different time periods in this post. Check its definition, examples, sample questions and answers. Therefore, a more complete version of the compound interest formula is: A = P (1 + r / n) nt. When using the formula A = P (1 + r/n) nt, keep in mind that the interest can be compounded daily, quarterly, triannually, semi-annually, twelve times a year (monthly), etc... Example #2. Let us modify example #1 a little bit! Compound interest is defined as the interest incurred on a loan or deposit amount of money. It is a familiar concept applied in day-to-day life. The compound interest for the deposit sum is dependent on both the Principal amount and Interest obtained over a period of time.