DO NOT USE THIS FORMULA!!!

Question

Compound Interest Formula
A(t) = P(1 + 1)*
USE THIS FORMULA & WRITE IT DOWN!
COMPOUND INTEREST FORMULA
Interest rate (decimal)
A = P(1+
R/n
nt -
Amount
Principal
Number of times interest is compounded
per year
Variable
Meaning
A
P
Answer
of money in the account
after t years

Answer
- the original amount (in
dollars) you put in the account
r
Answer
, written as a decimal
n
• Answer
' - number of times
interest is compounded per year
t
number of
Answer
the interest is
- =
compounded
:: times compounded per year
: years
: amount
principal
:: interest

Answer 1

Certainly! Below is the correct representation of the Compound Interest Formula along with its components:

COMPOUND INTEREST FORMULA

The formula for compound interest is given by:

\[ A = P\left(1 + \frac{r}{n}\right)^{nt} \]

Variable Meaning

• A: Amount of money in the account after \( t \) years.
• P: The original amount (in dollars) you put in the account (Principal).
• r: Interest rate (expressed as a decimal).
• n: Number of times interest is compounded per year.
• t: Number of years the money is invested or borrowed.

Breakdown of the Formula

• The term \( \frac{r}{n} \) represents the interest rate per compounding period.
• The exponent \( nt \) represents the total number of compounding periods (n times per year for t years).

Make sure to carefully use this formula for calculating compound interest!