Money grows by a fixed percentage each period when compounding is allowed.
highlighted = computed this step
Compound-interest formula
Each period multiplies the balance by one plus the period rate. Over n periods, this same multiplier is applied repeatedly.
$1,000.00(1+10%)3=$1,331.00
Worked thread
With $1,000.00 at 10%, after 1 period the value is $1,100.00, after 2, it is $1,210.00, and after 3, it is $1,331.00.
$1,100.00$1,210.00$1,331.00
Rounding and assumptions
We assume a single constant rate per period. We round-half-up to the cent for displayed money, so these values are exactly computed but shown at two decimals. Institutions or regulations may require different rules (for example, banker's rounding or round-half-to-even).