compound interest formula
if D> 0: 2 real solutionsif D<0: 2 non-real solutions if D=0 : exactly 1 solution
The compound interest formula is used to calculate the total amount of interest earned or payable on an initial investment over a specified period of time. The formula is expressed as follows:
A = P (1 + r/n)^(nt)
where:
A = final amount, including principal and interest
P = principal, or the initial amount invested
r = annual interest rate, expressed as a decimal
n = number of times the interest is compounded per year
t = length of time the money is invested, in years
To use this formula, you simply fill in the values for P, r, n, and t, and then solve for A. For example, if you invest $1,000 in a savings account that pays 5% annual interest, compounded monthly, for 5 years, the calculation would look like this:
A = 1000 (1 + 0.05/12)^(12*5)
A = 1000 (1.004167)^60
A = 1000 (1.276281)
A = $1,276.28
So, at the end of the 5-year period, you would have earned a total of $276.28 in interest, for a final account balance of $1,276.28.
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