Question

how do you compute compound interest

Answer 1

$A=P(1+\frac{r}{n})^{nt}$

Here, we want to find how to compute compound interest

To do this , we need some parameters;

1. The amount deposited

2. Interest rate

3. period and the number of times we want to compound within the period

The formula to use is;

$\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ \end{gathered}$

where A is the amount accumulated

P is the principal which is the deposit amount

r is the rate

t is the time frame

n is the number of times in the period (whether monthly (12 times), quarterly (3 times ) in a year

So to get the actual interest value, simply subtract principal from amount