What is the Formula for Calculating Compound Interest?

P = principal amount (initial investment)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years
A = amount after time t

Just plug in the amounts and solve for A. Be sure to express the interest rate as a decimal.

Let’s say you put $2,000 in a bank CD at an interest rate of 3.5% compounded quarterly. How much will you have after five years?