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Unformatted text preview: = + A P1 rnnt The P stands for the principal amount placed in the bank, the r designates for the rate, the n means how the principal is compounded (if annually, then n = 1, if quarterly, then n = 4, if daily, then n = 365). T means time in years. If we say the principal is 1000 dollars, rate is 5 percent, and time is 10 years, this is how it will be: = + A P1 rnnt = +. A 10001 051 10 = . A 10001 0510 . A $1628 9 This means that if you invest 1000 dollars in a bank at 5 percent interest for 10 years compounding, you will get back $1628.9 approximately....
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This note was uploaded on 04/20/2011 for the course MATH 116 taught by Professor Mcmillian during the Spring '09 term at University of Phoenix.
- Spring '09