# Compounded Interest

### The site is here to help you understand compounded interest

## How-To

You take the formula A=P(1+r/n)^nt and plug in the numbers accordingly.

Example:

Annual compound interest formula. If an amount of $5,000 is deposited into a savings account at an annual interest rate of 5%, compounded monthly, the value of the investment after 10 years can be calculated as follows... P = 5000. r = 5/100 = 0.05## Notes

You use the formula A=P(1+r/n)^nt and plug in the numbers.

A= The final amount

P= Original investment

r= interest rate

t= time in years of investment

n= number of times it is compunded

## Game/Interactive

Game:

http://www.math-play.com/Simple-Interest/Simple-Interest.htmlInteractive problem generator:

http://www.coolmath.com/crunchers/algebra-problems-compound-interest-1

## Compounded Continuously

The process of earning interest on top of interest. The interest is earned constantly, and immediately begins earning interest on itself.

An amount of $2,340.00 is deposited in a bank paying an annual interest rate of 3.1%, compounded continuously. Find the balance after 3 years. Solution. Use the continuous compound interest formula, A = Pe rt, with P = 2340, r = 3.1/100 = 0.031, t = 3.