Compound Amount
Future value with periodic compounding.
A = P(1 + r/n)^(nt)
Variables
- A
- future amount
- P
- principal
- r
- annual rate
- n
- compounds per year
- t
- years
Example
P=1000,r=.05,n=12,t=1 → about 1051.16
How to use this formula
Identify the known values, keep units consistent, substitute the values into the formula, and calculate carefully. Then check whether the result is reasonable for the original problem.