Answer
Compound interest is interest computed on the original investment as well as on any accumulated interest. It is computed by multiplying the principal amount by the sum of 1 and the annual interest rate, raised by the time of investment.
$A = P(1 + r)^t$
Work Step by Step
Compound interest is interest computed on the original investment as well as on any accumulated interest. It is computed by multiplying the principal amount by the sum of 1 and the annual interest rate, raised by the time of investment.
$A = P(1 + r)^t$