1. Compound Interest is the interest calculated on the cumulative amount, rather than being calculated on the principal amount only. Amount, A = P [1 + (R / 100)]n, where P is the principal, R is the rate of interest per unit time period and n is the time period.
2. The formula we use to find compound interest is A = P(1 + r/n)^nt. In this formula, A stands for the total amount that accumulates. P is the original principal; that's the money we start with. The r is the interest rate.
3. CI = A – P
This formula is also called periodic compounding formula. Here, A represents the new principal sum or the total amount of money after compounding period. P represents the original amount or initial amount.
