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So adding 10 interest is the same as multiplying by 1 10 now here is the magic.
Compounding formula math. Compound interest formula a simpler version of the compound interest formula is b p 1 r n where b is the final balance p is the principal r is the interest rate for 1 or each interest period and n is the number of payment periods. Your 1000 would grow to be 1157 62 after three years. We could do the. Free math lessons and math homework help from basic math to algebra geometry and beyond.
The rate is r 0 03 and the number of times compounded each year is m 12 initial investment of 5 000. Solution earns 3 compounded monthly. Going backwards to work out the present. This is the basic formula for compound interest.
The principal is the amount of money you deposit that you expect will grow over time. Students teachers parents and everyone can find solutions to their math problems instantly. Here s how you would get that answer using the formula and applying it to the known variables. For example let s say that you have 1000 to invest for three years at a 5 percent compound interest rate.
Remember it because it is very useful.
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