📊 Compound interest Formula
📊 Compound interest usually calculated in 4 form.
- A)
Yearly
~ we need to calculate the amount of interest for entire year. - B)
Half Yearly
~ we have to calculate interest amount for half year basis.
<aside> 💡 1 Year = 6 Months ➕ 6 Months
</aside>
- C)
Quarterly
~ Quarterly Compound interest based on every 3 months entire year.
<aside> 💡 1 Year = 3 Months ➕ 3 Months ➕ 3 Months
</aside>
- D)
Monthly
~ If the interest of compounding method for each & every months for single year.
Compound Interest is the concept that time spent now adds up over time. If you invest $100 today, you’ll have twice as much money tomorrow than if you invested $50 today. You’ll have four times as much money after two years, eight times as much money after three years, etc.
In this blog, you can get all formula about how to calculate compound interest.
🗓️Yearly Compound Calculation
- The function of compound interest calcution is
CI = (PV(1+R/100)n – PV*
- Explanation of interest Calculation is
PV
= ****Present ValueR
= RateN
= Period / Duration (year/half Yearly/quarterly /monthly)
🗓️Half-Yearly Compound Calculation
-
- The calculations of Half Yearly Compound interest is here
CI = PV(1+R/2/100)^2n) – PV*
- Full form of Half Yearly is
CI
= Compound InterestPV
= Principal ValueR
= Rate of interest2
= 6 Months + 6 MonthsN
= Year
🗓️Quarterly Compound Calculation
-
-
- Compound Interest for quarterly is
CI = PV ( 1 + R/4/100)^ 4n) – PV
- All full form are
CI
= Compound InterestPV
= Principal ValueR
= Rate4
= Q1 / Q2 / Q3 / Q4N
= Year
-
🗓️Monthly Compound Calculation
-
-
-
- Monthly interest for Compounding Method is
CI = ( PV * ( 1 + R/12/100) ^ 12n) – PV
- Full form of Monthly Compound interest is
CI
= Compound InterestPV
= Principal ValueR
= Rate12
= For each month of single yearN
= Year
-
-
Conclusion
These above mention functions of the compound unit are always useful for an accountant. Please follow us for more amazing banking-related calculations. thank you so much for your time.