Compound interest describes growth or decay when the percentage is applied each period to the previous value.
Compound growth
$$A=P\times\left(1+\frac{r}{100}\right)^{t}$$
where,
A— final value;
P— initial value;
r— periodic growth rate (percent);
t— number of periods.
Compound decay
$$A=P\times\left(1-\frac{r}{100}\right)^{t}$$
where,
A— final value;
P— initial value;
r— periodic decay rate (percent);
t— number of periods.
Compound Interest FAQ
What is compound interest?
Compound interest is growth where each new period is calculated from the previously accumulated value.
What is the compound interest formula?
For compound growth, the formula is A = P x (1 + r / 100) raised to t.
