1
Q
What is compound interest
A
interest from the principal; initial investment earns interest
2
Q
What is the addition of interest to the principle called?
A
the addition of interest to the principal is called compounding
3
Q
What is the formula
A
A = P (1+r/n) * n(t)
4
Q
What is P?
A
P = Principal, intial investment
5
Q
What is R?
A
R = rate; divide by 100.
6
Q
What is N?
A
N is; monthly, quarterly, bi-monthly
monthly: 12
quarterly: 4
bi-monthly: 6 (12 divided by 2)
7
Q
What is T?
A
of years
8
Q
What is A?
A
of dollars (future value)
9
Q
what is the formula for compounded continously
A
A = Pe*rt
10
Q
what is the formula for compounded
A
A = P (1+r/n)*n(t)
