Using the compound interest formula will help you calculate how much your investment will grow in value. The interest on the principal plus the interest on the interest equals compound interest. This formula is easy to understand and can be used for a savings account, IRA, or any other investment. Using this formula will also allow you to see the annual rate of compound interest on your investment.

Calculating compound interest

The compound interest formula can be used to calculate the interest on a savings account. Basically, the interest is added to the principal amount and the process repeats itself over time. This interest will continue to accumulate until the money is withdrawn. To calculate this interest, you can use a compound interest calculator.

Using the compound interest formula, you can calculate the annual rate of interest. Simply divide this rate by twelve to find the annual force of interest. … READ MORE ...