Formula for Compound interest

[mendhak]

I have here, scribbled on a piece of paper, a formula for compound interest... it looks like:

CI = P[(1+(r/n)ⁿ-1]

I'm not even sure if this is right. Could someone please give me the formula for compound interest, with the explanation of the terms.

Thanks.




yes, I am that dumb

[riis]

There is a missing right parenthesis in your formula.
I don't know if this formula is right. What does Google say about it?

[mendhak]

ERmm... I never thought of google. I must be losing it.

Anyways, I found it here http://www.stillwater.k12.ok.us/bowenTI83web/FG4.htm

The formula for simple interest is: F = P ( 1 + R / N ) ^ ( N * T )

Where : F = final amount
P = initial amount
R = interest rate
N = number of compounding periods
T = Time ( in years )

[silva]

Nope, that's the formula for compound interest


(PRT)/100 is the formula for simple interest, when:

P = principle (initial investment)
R = rate p.a. (as a percentage)
T = term (in years)

This will give future value after T years...

s.

[prog_tom]

Formula for compound interest n times in t years:

A = P(1 + r/n)^nt

Forumla for compound interest continuously in t years.

A = Pe^rt

where e is the Euler Number 2.718281828

[siyan]

Originally posted by prog_tom
Forumla for compound interest quarterly in t years.

A = Pe^rt

where e is the Euler Number 2.718281828

Quarterly?

P(e)^rt is the continually compounded one. If I still had my calculus book I'd give the proof...

[prog_tom]

Yes, that's the word, Continuesly(Unstopped).