# Compound Interest - Interest Added to Principal

Addition of interest to Principal amount is called compounding. Effect of compounding depends upon frequency with which interest is compounded and interest rate which is applied. This online calculator has been developed to calculate compound interest.

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**Formula:**

Total Amount = Principal + CI (Compound Interest)

a. Formula for Interest Compounded Annually

Total Amount = P(1+(R/100))^{n}

b. Formula for Interest Compounded Half Yearly

Total Amount = P(1+(R/200))^{2n}

c. Formulae for Interest Compounded Quarterly

Total Amount = P(1+(R/400))^{4n}

d. Formulae for Interest Compounded Annually with fractional years (e.g 2.5 years)

Total Amount = P(1+(R/100))^{a}×(1+(bR/100))

here if year is 2.5 then a =2 and b=0.5

e. With different interest rates for different years

Say x% for year 1, y% for year2, z% for year3

Total Amount = P(1+(x/100))*(1+(y/100))*(1+(z/100))

where CI = Compound Interest, P = Principal or Sum of amount, R = % Rate per annum, n = Time Span in years