Formulas

Question 1

Periodic formula

Answer 1

A = P ( 1 ? r/n ) ^nt

Question 2

Annual formula

Answer 2

A = P(1+r)^t

Question 3

Continuous formula

Answer 3

A = Pe^rt

Question 4

When do you use periodic vs annual formula?

Answer 4

Periodic = when the interest is compounded more frequently than once a year
Annual = when interest is compounded once a year