Question

write the formula to find the amount
the end of 'n' years compounded annually

and mention the terms in it.​

Answer 1

Answer:

KEY TAKEAWAYS

Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one.

Interest can be compounded on any given frequency schedule, from continuous to daily to annually.

When calculating compound interest, the number of compounding periods makes a significant difference.

Step-by-step explanation:

Compounding Periods

When calculating compound interest, the number of compounding periods makes a significant difference. The basic rule is that the higher the number of compounding periods, the greater the amount of compound interest.

The following table demonstrates the difference that the number of compounding periods can make for a $10,000 loan with an annual 10% interest rate over a 10-year period.