Question

How to solve for P in a compound interest formula?

Answer 1

Calculation. Formula.

P (1 + r/n)^(nt)

Calculate accrued amount. Principal + Interest. A = P(1 + r)t

Calculate principal amount. Solve for P in terms of A. P = A / (1 + r)t

Calculate principal amount. Solve for P in terms of I. ...

Calculate rate of interest. As a decimal. ...

Calculate rate of interest. As a percent. ...

Calculate time. Solve for t.

Answer 2

The solution for P (Principal amount) in a compound interest Formula is; P = A/(1+ r)^t.

Changing the Subject of a formula

By convention, the formula for calculating the compound interest is;

• A = P(1 + r)^t

On this note, it follows that; the principal amount, P can be calculated by dividing both sides of the equation by the expression; (1+ r)^t.

Ultimately, the solution for P is; P = A/(1+ r)^t.

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