The formula...
That is a compound interest formula r is the ANNUAL rate n is the number of compunding periods per year and t is the number of years.
Alright, then but what can this formula help to calculate? I'm still a bit confused...
It's an effective annual rate.
Suppose we had 5% interest.
Compounded quarterly we'd have an effective annual rate of
\(\left(1+\dfrac{0.05}{4}\right)^4 -1= 0.0509453 =5.09453\%\)
Compounded monthly
\(\left(1+\dfrac{0.05}{12}\right)^{12} -1=0.0511619 = 5.11619\%\)
+37153 
+73 
