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Lesson 5 - Compound Interest
Lesson 5 - Compound Interest
Lesson 5 - Compound Interest
A—Total amount
p —principle
r —interest rate
n —number of compounding periods
t —time in years
Example: $100 is invested at 10%
interest compounded yearly for 6 years
177.16
$250 invested at 6.5% for 8 years
compounded monthly.
419.92
Example……
$500 invested at 12% for 10 years
compounded yearly.
Answer……
Problem: Answer:
nt
r
$500 invested at A P 1
12% for 10 years n
compounded 110
.12
yearly. A 5001
1
A 5001.12
10
A 1552.93
Example……
$1000 at 7.25% for 9 years
compounded monthly.
Answer……
Problem: Answer:
nt
$1000 at 7.25% r
for 9 years A P 1
compounded n
monthly. (129 )
.0725
A 10001
12
A 1916.57
Try these:
1. $750 at 6.5% for 5 years compounded
annually
A 1027.56
Problem: Answer:
nt
$25,000 at 8% for 3 r
years compounded A P 1
annually n
13
.08
A 250001 .
1
A 250001.08
3
A 31492.80
Problem: Answer: