Compound interest

Future value with periodic compounding.

math functions finance

Implement `compound_interest(
    principal: float,
    annual_rate: float,
    years: int,
    compounds_per_year: int = 12,
) -> float`.

Use the standard formula:

`A = P × (1 + r/n)^(n×t)`

Where `P` is principal, `r` is the annual rate (e.g. `0.05` for 5%), `n` is
compounds per year, and `t` is years.

Return the balance rounded to **two decimal places** with `round(..., 2)`.

Constraints

principal ≥ 0; 0 ≤ annual_rate ≤ 1; years ≥ 0; compounds_per_year ≥ 1

Example

>>> compound_interest(1000, 0.05, 1, 12)
1051.16
>>> compound_interest(2000, 0.06, 2, 1)
2247.2

12 points ~12 min

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Hints

Use `(1 + annual_rate / compounds_per_year) ** (compounds_per_year * years)`.

Wrap the final amount in `round(..., 2)` before returning.

Test Results

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