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Compound interest
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Learn it A = P(1 + i)ⁿ, where i is the interest rate per compounding period and n is the number of periods. Monthly: i = annual rate ÷ 12 and n = 12 × years.
Example: $5000 at 4.8% per year, compounded monthly, for 3 years.
- i = 0.048 ÷ 12 = 0.004, n = 36.
- A = 5000(1.004)³⁶ ≈ $5772.95.
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