1. Compound Interest

2. A = P(1 + r/n)nt
A is the total amount after interest is added (the balance).
P is the principal (initial amount of money)
r is the annual interest rate (percent changed into a decimal)
n is the number of times in a year it is compounded
t is the time in years

3. Compound Interest
$1000 is invested at a rate of 3% compounded quarterly for 5 years.
Write the function
Take the 3% and divide it by 4 (Quarterly means 4 times a year) Make it a decimal and add it to one
( /4)
y = 1000 • ( /4)x
Replace x with 20 (5 years, 4 times a year) $

4. $18,000 invested at a rate of 4.5% compounded semi annually for 6 years
Find the growth factor
0.045 divided by 2 (Semi annually means twice a year) /2
( /2)
Write the function
y = • ( /2) x
Replace x with 12 (twice a year for 6 years)
$23,508.90

5. $4,500 in deposited in a savings account. The account receives 4
$4,500 in deposited in a savings account. The account receives 4.5% interest compounded monthly for 10 years.
𝐴=4500( ) 10·12 $