# 4_6 - Section 4.6 Compound Interest Instructor Ms Hoa...

This preview shows pages 1–3. Sign up to view the full content.

Section 4.6: Compound Interest Instructor: Ms. Hoa Nguyen 1 The compound interest formula The compound interest formula computes the amount A after t years due to a principal P invested at an annual interest rate r compounded n times per year. The compound interest formula is given by A = P (1 + r n ) nt where A = Amount (Future Value) P = Principal (Present Value) r = annual rate of interest (in decimal form) n = number of compounds per year t = number of years Example 1 : Example 2 : 1

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Example 3 : Example 4 : 2 Continuous Compounding The continuous compounding formula computes the amount A after t years due to a principal P invested at an annual interest rate r compounded continuously. The continuous compounding formula is given by A = Pe rt where A = Amount (Future Value) P = Principal (Present Value) r = an interest rate compounded continuously (in decimal form) t = number of years e 2 . 718 ...
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern