14. Compound Interest When a bank account pays compound interest, it pays interest not only on the prin amount that was deposited into the account, but also on the interest that has accum over time. Suppose you want to deposit some money into a savings account, and let account earn compound interest for a certain number of years. The formula for calcula the balance of the account after a specified number of years is: ula ti The terms in the formula are A is the amount of money in the account after the specified number of years. P is the principal amount that was originally deposited into the account r is the annual interest rate. n is the number of times per year that the interest is compounded. t is the specified number of years