Here is the formula for compound interest:
A = Account balance after interest is earned
P = Principal (starting amount)
r = interest rate (as a decimal)
n = compounding factor (number of times per year the interest is calculated)
t = time in years
Your 2 year investment of $5,300 earns 2.9% and is compounded annually. What will your total return be?
You invested $100 at 8.2% which is compounded annually for 7 years. How much will your $100 be worth in 7 years?
Your investment of $18,100 at 13.6% compounded quarterly for 7½ years will be worth how much?
What would his final balance be if Joe earned simple interest?
How much would Joe earn if the interest was compounded annually?
How much would Joe earn if the interest was compounded monthly?
How much would Joe earn if the interest was compounded daily?
How does the compounding factor affect the amount of interest that Joe earns?
If we kept increasing the compounding factor do you think that Joe's earnings would keep increasing or would we hit a limit?
BONUS: How much would Joe earn if the interest was compounded every second?