What is the formula for compound interest?

The formula for calculating compound interest is: A = P(1 + r/n)^(nt) Where: A is the amount of money at the end of the investment period P is the principal or initial amount of money invested r is the annual interest rate, expressed as a decimal n is the number of times per year that the interest is compounded t is the number of years the money is invested This formula takes into account the effect of compound interest, which means that interest is calculated not only on the initial investment amount but also on the interest earned in previous periods. For example, if you invest $1,000 at an annual interest rate of 5%, compounded monthly for 5 years, the calculation would be: A = 1000(1 + 0.05/12)^(12*5) A = 1000(1.004167)^60 A = 1000(1.27628) A = $1,276.28 Therefore, the amount of money at the end of the investment period would be $1,276.28.