Best Math Formula website. Search anything about Math Formula in this website.
what is the equation for compound interest continuously. An interest rate formula helps one to understand loan and investment and take the decision. Compound interest is the addition of interest to the principal sum of a loan or deposit or in other words interest on interest.
Simple Interest Compound Interest Continuously Compounded Interest Simple Interest Simple Interest Math Word Problems from www.pinterest.com
The formula for compound interest is P 1 rnnt 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. Continuous Compounding Formula P erf. So 1 rn is the interest per compound note that per period divided out.
In the formula A represents the final amount in the account that starts with an initial P using interest rate r for t years.
This means that at the end of the first year youll receive 1 extra dollar. Lets first review how simple interest works. Exponential Growth and Decay One very important exponential equation is the compound -interest formulawhere A is the ending amount P is the beginning amount or principal r is the interest rate expressed as a decimal n is the number of compoundings a year and t is the total number of years. These days financial bodies like banks use the Compound interest formula to calculate interest.
