Now we will see the problem of compound interest.
Formula:
A = Total amount, P = principal or amount of money deposited or borrowed, r = annual interest rate (in decimal form), n = number of times compounded per year, and t = time in years.
Example 1: If you deposit $7000 into an account paying 5 % annual interest compounded bimonthly, how much money will be in the account after 6 years? What is the total interest for 6 years? As per the compound interest calculation, what is total interest per year, and what is the rate of interest PCPA?
Solution:
Given:
Principal P = 7000, Rate of interest r = 0.05, n = 2 (as the interest is calculated bi-monthly), and t = 6.
Here we can use a logarithm to do these calculations. see the following steps carefully.
Now see the software tool for getting these results systematically. Click on the following figure and try the result for your values.
Now we will see other calculation software for compound interest in the next blog.
