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 times per year, the formula is .
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 , where is Euler’s number ( ).

Summary of Results:

  • Compounded annually:
  • Compounded quarterly:
  • Compounded monthly:
  • Compounded continuously: