# Compound Interest Formula

The compound interest formula calculates the growth of a principal amount with compounding interest over time.

Expression | Description |
---|---|

Accumulated amount. | |

Principal amount. | |

Rate of interest expressed as a decimal value. | |

Frequency of investment per time period. | |

Time elapsed. |

The compound interest formula calculates the growth of a principal amount with compounding interest over time. For example, given an interest rate of , a principal amount of , time elapsed of and a yearly investment strategy , the formula calculates the accumulated amount. This is shown below.

This example calculates the accumulated value of an investment given an interest rate of , a principal amount of , time elapsed of and a **quarterly** investment strategy . This is shown below.

Note, while the interest rate is , the interest rate applied for each quarter is only .

This example calculates the accumulated value of an investment given an interest rate of , a principal amount of , time elapsed of and a **monthly** investment strategy . This is shown below.