What is an advantage of renting a place to live? lower up-front costs payments change from month to month low down payment incre
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<span>Compound interest formula</span>
Where
<span>
A= Future value
P =
the Principal (the initial amount of money)
r = annual interest rate</span>
t = time
<span>n= number of times compounded in one tRemark
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r is generally a percentage like 3%, 7% etc and are applied in the formula as 0.03, 0.07...,
the interest is compounded generally annually (n=1), quarterly (n=4), monthly (n=12), etc...
t is in years,
In our problem:
</span>
A= 30 000
P =20 000
r = 15%=0.15
time = t = ?
n= 4applying the formula:
75% of 12 months is 3/4 of 12 months, which is 9 months
Answer: 2 years, 9 months