Compunding periodic payments

MrAnchovy

For a series of $n$ periodic payments accumulating interest at a rate of $r$ per period, the total compound interest is $\frac{(1-r^n)}{n(1-r)}-1$.

Note that to convert an annual rate (APR) $r{\tiny APR}$ to a monthly rate use the formula $(1+r{\tiny APR})^\frac{1}{12}-1$.

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Tuesday, 19 March 2013 14:22 GMT