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how to solve compound interest rate problems. A 2000 1 003 3 218545. Example 1A 1000 deposit is made at a bank that pays 12 compounded annually.
Practice Applying Compound Interest Formulas With These Word Problems Word Problems Financial Literacy Worksheets Word Problem Worksheets from www.pinterest.com
A 2000 1 003 1 2060. This algebra precalculus video tutorial explains how to use the compound interest formula to solve investment word problems. If yo u deposit 8000 into an account paying 7 annual interest compounded quarterly how long until there is 12400 in the account.
COMPOUND INTEREST FORMULA A P 1 r n n t Where A is the account balance P the principal or starting value r the annual interest rate as a decimal n the number of compoundings per year and t the time in years.
Example 1A 1000 deposit is made at a bank that pays 12 compounded annually. We can use this formula to calculate the simple interest. Solution B P 1 r n P 3000 r 2 annual interest rate 2 interest periods 1 semiannual interest rate n number of payment periods number of interest periods times number of years. There are other types of questions that can be answered using the compound interest formula.
