In the above formula, P stands for the principal value, R is the rate of interest, and n is total time. Here, we will learn to calculate compound interest using Excel.

How Simple Interest Works: An Example Suppose you take out a $5,000 loan at 6% interest for two years. To calculate the amount of interest you will pay, use the simple interest formula above.

If you want to nerd out, according to Citi, the formula for calculating compound interest is A = P (1 + r/n)⁽ⁿᵗ⁾.

How does compound interest work with CDs? There are two kinds of interest you can earn on a deposit account: simple and compound interest.

CNBC Select defines compound interest, how it works and ways to take advantage of it if you're looking for a new credit card or somewhere to stash your cash.

He who doesn’t, pays it.” What is compound interest, and what makes it so great? I got in touch with Julie Guntrip, financial wellness expert at Jenius Bank, to find out.