Precalculus 6.7 – Compound Interest and Annuities Name
Compound Interest. If you invest P dollars at the annual interest rate r, then after one year the interest is I = rP dollars, and the total amount is A = P + I = P (1 + r). This is simple interest. For compound interest, the year is divided into k equal time periods and the interest is calculated and added to the account at the end of each period. ................
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