Question

What is the compound interest if $470 is invested for 9 years at 10% compounded continuously?

Answer 1

Compound interest formula

P = the principal (the initial amount)  

r=  annual

interest rate (

expressed

as a decimal)

expressed

as a decimal)

annual

interest rate (

expressed

as a decimal)  

n=

number of

interest periods  

per year  

(see the  

table below

for more information)  

t=

number of years

P is invested  

A=amount after t  

years

If investment interest rate is  

compounded monthly

, then n = 12  

If investment interest rate is  

compounded quarterly

, then n = 4  

If investment interest rate is

compounded semi-annually

, then n = 2

If investment interest rate is  

compounded annually

, then n = 1