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how to solve compound interest without a calculator. Where n is 5 in your example For example investing one million dollars at 2 per annum compounded daily for five days the interest would be about 27781 and the approximation would be 27778 off by only 003. After one year you will have 100 10 110 and after two years you will have 110 10 121.
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In this equation A equals the amount you will have at the end of the term P equals the principal you originally invested r equals the interest rate you are receiving n equals the number of times the interest is compounded over the year and t equals the amount of years the interest is being compounded for during the calculation. If youre calculating the compound interest for a period less than one year then youll have to divide the number of months by 12 before calculating compound ratio. I have alot of students that struggl.
Enter your principal in cell B2.
Lets look at the quantities in the problem statement. If you are working through a set of problems for a school assignment these variables may be in a textbook or worksheet given to you by a teacher. For instance if your common ration is 105 for six months. The nominal annual interest rate is entered and the HP 10bII automatically uses the value for the number of periods per year to compute the interest rate per period.
