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How do you fill in this chart? I’m completely lost it seems really difficult for me and really confusing .

How do you fill in this chart? I’m completely lost it seems really difficult for me-example-1
User Djunod
by
7.3k points

1 Answer

1 vote

With Compounding Interest, if we compound a certain amount of times, we use the formula A = P (1 + r/n)^nt.


Where,

A = Amount after t (time)

P = Principal, or starting amount

R = Interest rate, as a decimal (ex. if 6%, .06)

N = Number of times in which the value is compounded per year (semiannually = 2, quarter-annually = 4, etc...)

T = The amount of time the money is being compounded over.


So, because the amount of times your value is compounded is the only thing that changes, we will get a value of A every time. All we have to do to the equation is change the amount of times the value is compounded.


So our equation looks like this: A = 900(1 + .06/n)^n(10)

a) Annually, n = 1, because once per year. A = 900(1 + .06/1)^1(10)

b) Semiannually, n = 2, because twice per year. A = 900(1 + .06/2)^2(10)

c) Quarterly, n = 4, because 4 per year. A = 900(1 + .06/4)^4(10)


Hope this helps!!


Best,

Josh

User Typesanitizer
by
6.2k points
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