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P 5 000 amount invested.
Compounded annual interest formula math. A p 1 r n. View finance formulas docx from math 1325 at tarrant county college northeast. The compound annual growth rate. The formula for continuously compounded interest is defined as.
I pr t s p i p 1 rt for annual compounding for t years r s p 1 m compound. Here p denotes the principal r represents the annual interest rate n is the number of times the interest is compounded per year and t is the time in years. However if you borrow for 5 years the formula will look like. The math formula is the same as above.
The formula for compound interest is p 1 r n nt where p is the initial principal balance r is the interest rate n is the number of times interest is compounded per time period and t is the number of time periods. The rate of interest is 6 per year. Math info pre algebra algebra continuously. When the interest is compounded once a year.
You need ending values beginning values and a length measured in years. Compound interest is the interest on a loan. In the formula a represents the final amount in the account that starts with an initial p using interest rate r for t years. S pe rt.
The formula used for finding compound interest is. A p 1 r 5. A is the amount of money accumulated after n years including interest. How much money will she have after five years.
To calculate continuously compounded interest use the formula below. Compound interest or interest on interest is calculated with the compound interest formula. A woman deposits 5 000 into a savings account with continuously compounded interest at an annual rate of 4 5.
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