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Compound Interest Calculation: Annually, Quarterly, Monthly, and Continuously
Published on May 29, 2026
Word-Problem
Calculate the future value of an investment with compound interest applied at different frequencies: annually, quarterly, monthly, and continuously.
Question
Answer
To solve this problem, we will use the formulas for compound interest.
Given Information:
- Principal amount (
) = - Annual interest rate (
) = - Time (
) = years
1. Find the amount if interest is compounded annually:
For annual compounding, the formula is
2. Find the amount if interest is compounded quarterly:
For compounding
For quarterly compounding,
For quarterly compounding,
3. Find the amount if interest is compounded monthly:
For monthly compounding,
4. Find the amount if interest is compounded continuously:
For continuous compounding, the formula is
Summary of Results:
- Compounded annually:
- Compounded quarterly:
- Compounded monthly:
- Compounded continuously: