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MBF3C Compound Interstate: ___Changing Conditions on Investments & Loans Terminology: TERM The length of time that an investment is held or a loan is carried. Some Truths About Interest 1. The higher
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How to fill out how compound interest works

01
Understand the formula for compound interest: A = P(1 + r/n)^(nt)
02
Identify the variables in the formula: A is the amount of money accumulated after n years, P is the principal amount, r is the annual interest rate, t is the time the money is invested for, and n is the number of times that interest is compounded per year.
03
Plug in the values for each variable in the formula.
04
Calculate the amount of money accumulated after n years.

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Students studying finance or economics
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Anyone interested in understanding how their savings grow over time
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Compound interest is interest that is calculated on the initial principal and also on the accumulated interest of previous periods.
Individuals or businesses who have investments or loans that accrue compound interest may need to report it.
To calculate compound interest, use the formula A = P(1 + r/n)^(nt) where A is the amount of money accumulated after n years, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years.
The purpose of compound interest is to allow investments to grow over time by earning interest not just on the initial investment, but also on the interest earned in previous periods.
The amount of the initial principal, the annual interest rate, the number of compounding periods per year, and the number of years the interest will be compounded for.
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