How do you calculate compound interest?

Chemistry

ScanSolve AI Answer

Compound interest is calculated using A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate, n is the number of times compounded per year, and t is the time in years. Example: 1,000at51,000 at 5% compounded monthly for 3 years: A = 1000(1 + 0.05/12)^(12×3) = 1000(1.00417)^36 ≈ 1,161.62. The key difference from simple interest (I = Prt) is that compound interest earns interest ON interest.

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