# How to Calculate Compound Interest: Here's the Simplest Way!

Calculation of compound interest is a basic and widely used mathematical calculation.

Prashant Magar

Last Updated: Feb 25, 2019

Compound Interest: An Overview

Compound interest can be calculated as per the norms laid down by the condition of the respective agency or institution. For example, if you want to borrow a loan from a bank, then you will have to consider the loan interest that will have to be paid for the borrowed amount.

How to Calculate Compound Interest

The mathematical formula for the calculation of the total amount (A) based on a certain rate of compound interest calculated (R) for a specified time period (n) is:

A = P × (1 + R/100)

A = P × (1 + R/100)

^{n}Interest = A − P

Thus, the interest amount in this case itself serves as a principal to garner furthermore interest.

A = P × (1 + R/200)

^{2 × n}