Formula for calculating compound interest:
F = P(1 + r/n)^(nt)
F = future value
P = principal amount
n = number of times the interest is compounded per year
r = annual interest rate
t = number years
Example: An amount of $2000.00 is deposited in a bank with an
annual interest rate of 5.5% compounded quarterly. Find the future value of after 3 years.
P = $2000.00
r = 0.055
t = 3
n = 4 (quarterly), n = 1 for annually, n = 2 for semi-annually
F = 2000(1 + 0.055/4)^(0.055(3))
Enter
2000(1 + 0.055/4). Press "
the power of" button then enter
(4 X 3). Press equal to see the result (2356.136256).
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