When a sum of money is borrowed for a period, an extra amount has to be
paid along with the borrowed money. The fixed rate of the extra amount
is called interest. Compound interest is the total interest that includes the original
interest and the interest of the new principal which is obtained by
adding the original principal to the due interest. For monthly compound
interest, the interest in compounded all months in a year.
The Monthly Compound Interest Formula is given as,