Final answer:
Compound interest formula explained with key components.
Explanation:
Compound interest is an interest rate calculation on the principal plus the accumulated interest. To calculate compound interest, you can use the formula:
Compound interest = Future Value - Present Value
Where:
- Future Value is the total amount after interest
- Principal is the initial amount of money
- Interest Rate is the rate at which interest is calculated
- Time is the duration for which the interest is applied
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