A compound interest calculator calculates the future value of an investment or loan, taking into account the initial principal amount, the interest rate, and the time period over which the interest compounds. The formula to calculate the interest compound can be written as:
\begin{equation}
A = P\cdot\left(1+\frac{r}{n}\right)^{nt}
\end{equation}
where:
- \(A\) - the future value of the investment/loan, including interest
- \(P\) - the principal investment amount (the initial amount of money)
- \(r\) - the annual interest rate (in decimal)
- \(n\) - the number of times that interest is compounded per year
- \(t\) - the time the money is invested/borrowed for, in years