5 Round to the nearest cent as needed The amount of interest earned is. R Annual Interest Rate. The formula for compound interest is P 1 rn nt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded.
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COMPOUND INTEREST FORMULA A P 1 r n n t Where A is the account balance P the principal or starting value r the annual interest rate as a decimal n the number of compoundings per year and t the time in years. A P 1 r m m t 3500 1 0015 4 4 2 360639. A P 1 r n n t A 1 000 000 1 06 12 12 5 A 1 000 000 1 0005 12 5 A 1 000 000 1005 60 A 1 348 85015. Where A is the ending amount P is the beginning amount or principal r is.