Compound/Exponential

Front

What does 'A' stand for in the compound interest formula A=P(1+r)^t?

Back

The total amount.

Front

If Jacob borrows $500 at an interest rate of 2.5% compounded annually for 5 years, how much will he owe?

Back

$565.70.

Front

What is the rate of growth in the equation y = 5(1.27)^x?

Back

27%.

Front

If you invest $1,900 at 4% interest compounded annually for 3 years, how much interest do you earn?

Back

$237.24.

Front

How much will Arnold's pay after 30 years on a $195,000 loan at 4.3% interest compounded annually?

Back

$689,546.99.

Front

Define compound interest.

Back

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Front

What is the formula for compound interest?

Back

A = P(1 + r/n)^(nt), where A is the amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any accumulated interest.

Front

What does 'r' represent in the compound interest formula?

Back

The interest rate.

Front

What does 't' represent in the compound interest formula?

Back

The time in years.