Finance: compound interest
Finance: compound interest
Now that we understand the concepts behind exponential growth and decay, let's utilize them and solve reallife problems! One of the many areas where exponential growth comes in handy is Finance. In this section, we will learn how compound interest helps us grow our deposits in our investment and/or bank accounts.
Lessons
Notes:
exponential growth/decay: ${ A_f = A_i (1+\frac{r}{n})^{nt}}$
${A_f}$: final amount
${A_i}$: initial amount
${r}$ : Annual interest rate
${t}$: total time given in years
${n}$ : number of times compounded in a year, if
Compound daily: 
n = 365 
Compound monthly: 
n = 12 
Compound quarterly: 
n = 4 
Compound semiannually: 
n = 2 
Compound annually: 
n = 1 

1.
Bianca deposits $1,000 in a savings account with an annual interest rate of
12%. How much money will she have in 20 years, if the interest is compounded: