Video Explanation of Compound Interest. Compounding interest multiple times a yearWatch the next lesson. From the base formula A P 1 rt derived from A P I and I Prt so A P I P Prt P 1 rt Note that rate r and time t should be in the same time units such as months or years.
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It explains how to calculate the interest earned over a per. For year 3 the principal amount is 1060 6360 112360. The total amount accrued principal plus interest from compound interest on an original principal of. This algebra precalculus video tutorial explains how to use the compound interest formula to solve investment word problems.