# Compound Interest

Compound interest occurs when the accrued interest on a sum is added to the principle after each period. This is the most common method of paying interest on savings accounts. The basic formula for compound interest is show below.

### Key Terms to Know for Compound Interest

• FV = Future Value
• PV = Present Value
• k = interest rate as decimal
• n = number of periods

## Calculate Compound Interest Future Amount

This calculator will calculate the future value of a present amount using compounding interest.

Starting Amount (Present Value): \$

Interest Rate per Period: %

Number of Periods:

\$
Enter values to calculate the Compound Interest Future Value

## A few Sample Test Questions

What will 10,000 be worth in 10 years if it earns 5%  interest that is compounded annually?

If you put \$600 into a savings account that accrues 2.5% annual interest, what will it be worth in 25 years?

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