Compound Interest
The interest that is calculated using both the principal and the interest that has accrued during the previous period is called compound interest. It differs from simple interest in that the principal is not taken into account when determining the interest for the subsequent period with simple interest.
Compound Interest Formula:
The compound interest formula is given below:
Compound Interest = Amount – Principal
The amount is given by:
`A= P \left( 1+ \frac{r}{100 n}\right)^{nt}`
Where,
A = total amount of money after compounding
P = principal
r = rate of interest on given principal
n = number of times interest is compounded per year
t = time period (in years)
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