Identify the principal amount (P)
Identify the annual interest rate (r) (as a decimal)
Identify the time period (t) (in years)
Identify the compounding frequency (n) (times per year)
Use the formula (A = Pleft(1+frac{r}{n}right)^{nt})
Compute the compound interest (CI = A – P)
If interest is compounded annually ((n=1)), use (A = P(1+r)^t)