If I invest P dollars at r% then at then end of the period it is worth P +
Pr or P(1+r)
So after the second period it is worth P(1+r) + P(1+r)r (principal +
interest)
This the same as P(1+r)^2
So after n periods it is worth P(1+r)^n.
Since it was worth P at the start, the interest is P(1+r)^n - P
If the annual rate is R, the daily rate is R/365 (r=R/365)
3 years is 3*365 so n=3*365
Some people use a fictional 360-day year for these calculations
If I invest P dollars at r% then at then end of the period it is worth P +
Pr or P(1+r)
So after the second period it is worth P(1+r) + P(1+r)r (principal +
interest)
This the same as P(1+r)^2
So after n periods it is worth P(1+r)^n.
Since it was worth P at the start, the interest is P(1+r)^n - P
If the annual rate is R, the daily rate is R/365 (r=R/365)
3 years is 3*365 so n=3*365
Some people use a fictional 360-day year for these calculations
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