By: Ms. Naira

A=P(1+r/n) tn P = principal amount (the initial amount you borrow or deposit/invest) r = annual rate of interest (as a decimal) t = number of years the amount is deposited or borrowed A = amount of money accumulated after n years, including interest. n = number of times the interest is compounded per year

A= P= R= N= T=

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A= P=R=N= T=

A=$50,000 P=?R=.08 N= 12 T=10 $50,000 = p(1+.08/12) 10(12) $50,000 = p( 1.008) 120 $50,000 = p(2.3095) Isolating a variable: divide both sides by the same amount $50,000/ = p(2.3095)/ $21,649.71= p In other words we need to invest $21, today so that in 10 years we have the $50,000 we want