What does the formula mean?

A = final amount, P = principal, r = annual rate (decimal), n = compounds per year, t = time in years.

How is it different from simple interest?

Compound interest earns on principal plus prior interest; simple interest is only on principal.

Understand and calculate compound interest. A = P(1 + r/n)^(nt). Calculator included.

A = P(1 + r/n)^nt

A = amount, P = principal, r = annual rate, n = compounds per year, t = years

Principal (P)

Annual rate % (r)

Compounds per year (n)

Years (t)

What does the formula mean?: A = final amount, P = principal, r = annual rate (decimal), n = compounds per year, t = time in years.
How is it different from simple interest?: Compound interest earns on principal plus prior interest; simple interest is only on principal.

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