Compound interest formula

Compound Interest Formula:

A=P(1+r/n)nt

A=Amount

P=Principal

r=Rate of interest

n=Rate of times per year, interest is compounded

nt=Time in years

Examples:

1. If you start a bank account with $10,000 and your bank compounds the interest quarterly at an interest rate of 8%, how much money do you have at the year's end ? (assume that you do not add or withdraw any money from the account)

Answer:

$10,824.32

2. The first credit card that you got charges 12.49 % interest to its customers and compounds that interest monthly. Within one day of getting your first credit card, you max out the credit limit by spending $1,200 . If you do not buy anything else on the card and you do not make any payments, how much money would you owe the company after 6 months?

Answer:

$12,77

(little bit of a highlighter problem lol)