Compound Interest Calculator
Compound interest is interest that is paid on both the principal and also on any interest earned and accumulated.
The formula used to calculate compound interest is:
M = P ( 1 + i )n
M is the final amount including the principal.
P is the principal amount.
i is the rate of interest per year.
n is the number of years invested.
Applying the Formula
Let's say that I have $1000.00 to invest for 3 years at rate of 5% compound interest.
M = 1000 (1 + 0.05)3 = $1157.63.
My $1000.00, after 3 years, is worth $1157.63.