The formula for compound interest is:

$A = P \left(1 + \frac{r}{n}\right)^{nt}$

Where:

• $A$ = the future value of the investment/loan, including interest
• $P$ = the principal investment amount (the initial deposit or loan amount)
• $r$ = the annual interest rate (in decimal form)
• $n$ = the number of times that interest is compounded per year
• $t$ = the number of years the money is invested or borrowed for

This formula calculates the total amount $A$ after $t$ years, where the interest is compounded $n$ times per year.

Would you like more details or have any questions?

Related Questions:

1. How does the frequency of compounding affect the final amount?
2. What is the difference between compound and simple interest?
3. How do you derive the compound interest formula?
4. How can you calculate the compound interest if the interest rate changes each year?
5. What are some real-life examples where compound interest is used?

Tip: When dealing with compound interest, always convert the interest rate into a decimal form before using it in the formula (e.g., 5% becomes 0.05).