Compound interest

by theDatatalks . 22 Apr 2020

For detailed explanation, please refer Reinvestment Deposit Scheme

The total interest receivable from compounding is calculated from the below formula

[ (1+(i÷n))t*n-1 ] * p

where,

  • i - Rate of Interest(%)

  • n - Number of times compounded in a year(period)

    • Quarterly has 4 times compounding in a year,
      we have to compound the interest for every 3 months
    • HalfYearly has 2 times compounding in a year,
      we have to compound the interest for every 6 months
    • Monthly has 12 times compounding in a year,
      we have to compound the interest for every 12 months
    • Yearly has 1 time compounding in a year,
      we have to compound the interest for every 1 month
  • t - Total number of periods(years)

  • p - One time invested amount(currency)

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