Section 7.5: Compound Interest
Essential Ideas

  • Variables Used With Interest Formulas

    A = FUTURE VALUE     This is the principal plus interest.

    P = PRESENT VALUE     This is the same as the principal.

    r = INTEREST RATE     This is the annual interest rate.

    t = TIME     This is the time in years.

    n = NUMBER OF COMPOUNDING PERIODS EACH YEAR

    N = nt     This is the number of periods.

    i = r/n     This is the rate per period.