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Monthly Compounded Interest


Date: 10/24/96 at 13:21:55
From: Anonymous
Subject: monthly compound interest formula

Please give me the formula for monthly compound interest accruing for 
the year.


Date: 10/24/96 at 22:27:0
From: Doctor Robert
Subject: Re: Monthly compound interest formula

If i is the (annual) interest rate, P is the principal, n is the 
number of compoundings per year, and t is the number of years, then 
the value of an account A is

  A = P(1 + i/n)^(nt)  

So for 12 compoundings a year (monthly!) the value of the account
would be

  A = P (1+i/12)^(12t)

-Doctor Robert,  The Math Forum
 Check out our web site!  http://mathforum.org/dr.math/

Associated Topics:
High School Interest

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