Compound Interest Notes. Thus the total after two years is 1 120. P 1 i n 1 where p.
It s important to note with simple interest the amount earned will stay the same every year. The formula necessary to solve most compound interest problems is. You could also click on the link above to revise what you learnt on compound interest in class 8.
1200 1 0 02 4 4 3 1200 1 005 12.
1200 invested at a rate of 2 compounded quarterly. It is different from the simple interest where interest is not added to the principal while calculating the interest during the next period. Fv future value pv present value r interest rate as a decimal value and. Interest is payment from a borrower to a lender of an amount above repayment of the principal sum amount.
