Question
What type of answer does the compound interest formula from ou
Answers
GPT-4o mini
The compound interest formula typically provides the total amount of money accumulated after a certain period, including both the principal and the interest earned. The formula is expressed as:
\[ A = P (1 + r/n)^{nt} \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount (the initial amount of money).
- \( r \) is the annual interest rate (decimal).
- \( n \) is the number of times that interest is compounded per year.
- \( t \) is the number of years the money is invested or borrowed.
This formula helps in calculating the future value of an investment or loan with compound interest, allowing the user to understand how the principal grows over time. The output will generally be a monetary value representing that total amount accumulated at a specific future time.
\[ A = P (1 + r/n)^{nt} \]
Where:
- \( A \) is the amount of money accumulated after n years, including interest.
- \( P \) is the principal amount (the initial amount of money).
- \( r \) is the annual interest rate (decimal).
- \( n \) is the number of times that interest is compounded per year.
- \( t \) is the number of years the money is invested or borrowed.
This formula helps in calculating the future value of an investment or loan with compound interest, allowing the user to understand how the principal grows over time. The output will generally be a monetary value representing that total amount accumulated at a specific future time.