I'm so confused! is it Pe^rt or is it
A=P(1+r/n)^nt (A=?, P=principle, r=rate, n=?, t=time)
help me i have an algebra final tomorrow!
in Per^rt
P= principle
e=e
r=rate
t=time
2007-12-19 16:55:01 · 3 answers · asked by Anonymous in Science & Mathematics ➔ Mathematics
Both are formulas for compound interest.
A = P(1+r/n)^nt
is the formula for interest which is compounded periodically.
A = Pe^rt
is the formula for interest which is compounded continuously.
As the number of periods (n) in the first formula gets larger and larger, it becomes closer to the second formula. When n = infinity, the first formula is identical to the second.
2007-12-19 17:04:29 · answer #1 · answered by lithiumdeuteride 7 · 0⤊ 0⤋
same things in the other formula
A= future value
n= number of times compounded a year (quarterly=4 annually=1 semi-anually= 2 monthly = 12)
A=P(1+r/n)^nt is correct
Pe^rt is continuous interest
2007-12-20 01:05:30 · answer #2 · answered by the worr e ore 5 · 0⤊ 0⤋
The regular compound interest formula is:
A=P(1 + r/n)^nt
This corresponds to n periods per year.
If you let n get larger and larger (until you are compounding continuously), this formula reduces to:
Pe^rt
2007-12-20 01:00:50 · answer #3 · answered by Ben 3 · 0⤊ 0⤋