Deducing a Formula for Compound Interest

Suppose Rs. P is the sum on which interest is compounded annually at a rate of R% per annum for 'n' years. Therefore,

Principal for first year	=	P
Interest for first year	=	=
Amount at the end of first year	=	P + =
Principal for second year	=
Interest for second year	=	=
Now amount at the end of 2^nd year	=	+
	=
	=

Proceeding in the same way, the amount at the end of 'n' years will be: A =

Hence, the formula for finding amount at the end of 'n' years for principal P and

rate of interest R% per annum is: A =

and compound interest (C.I.) =