What is the compound interest formula and what does it mean

The video tutorial introduces the concept of compound interest, explaining how it involves earning interest on both the initial investment and previously earned interest. It discusses the exponential growth of money through compound interest and provides a detailed explanation of the compound interest formula. The tutorial breaks down each component of the formula, including the final amount, initial amount, rate, compounding frequency, and time. Practical examples are given to illustrate how the formula is applied in real-world scenarios.

How does the frequency of compounding affect the final amount in an investment?

What is the impact of interest rates on the growth of an investment over time?

Provide an example of how to calculate the final amount using the compound interest formula.