Compound interest is calculated using the formula:

```
A = P * (1 + r/n)^(nt)
```

where:

`A`

is the amount of money accumulated after n years, including interest.`P`

is the principal amount (the initial amount of money).`r`

is the annual interest rate (in decimal).`n`

is the number of times that interest is compounded per year.`t`

is the time the money is invested for in years.

## Python Code Example

```
# Function to calculate compound interest
def calculate_compound_interest(principal, rate, times_compounded, years):
# Convert annual rate from percentage to decimal
rate_decimal = rate / 100
# Calculate compound interest
amount = principal * (1 + rate_decimal / times_compounded) ** (times_compounded * years)
return amount
# Example usage
principal = 1000 # Initial amount
annual_rate = 5 # Annual interest rate in percentage
times_compounded = 4 # Quarterly compounding
years = 10 # Investment duration in years
# Calculate the final amount
final_amount = calculate_compound_interest(principal, annual_rate, times_compounded, years)
# Output the result
print(f"The amount after {years} years is: ${final_amount:.2f}")
```

## Explanation

In this code:

- The
`calculate_compound_interest`

function takes the principal, annual interest rate, number of times compounded per year, and number of years as parameters. - The annual interest rate is converted from a percentage to a decimal.
- The compound interest is calculated using the formula and returned.
- In the example, we calculate the amount for a principal of $1000 with an annual interest rate of 5%, compounded quarterly, over 10 years.

## Conclusion

The provided Python program effectively calculates compound interest using a straightforward formula. You can adjust the principal, rate, compounding frequency, and duration to fit different scenarios.