# The Compound Interest Equation

The formula compound Interest as,

P => Principal Amount or Base Amount
r => Annual Rate of Interest
t => Number of Years.
A=> Accumulated Money after (n) years with including Interest.
n =>  Compound Interest Interval(Daily, Quarterly, Half yearly, Yearly).

For example,

Q.) An amount of \$2,000 is deposited in a bank paying an annual interest rate of 14%, compounded yearly. What is the balance after 5 years?

Ans.)
a)      Principal amount: \$2,000
b)     Interest Rate: 14%
c)      Effective Annual Rate: 14%
d)     Calculation Period: 5 years

P = 2000, r = 14/100 = 0.14, n = 1, t = 5. Accordingly,

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