Periodic compounding
Description
Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of interest to the principal is called compounding.The amount function for compound interest is a power law function in terms of time.
Related formulasVariables
At | The amount after t periods (dimensionless) |
A0 | The initial amount (dimensionless) |
r | Nominal annual interest rate expressed as a decimal. (dimensionless) |
n | Number of compounding periods per year (dimensionless) |
t | Total time in years (dimensionless) |