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Questions and Answers
What is the formula for calculating simple interest?
What is the formula for calculating simple interest?
- $a(1+r)^t$ (correct)
- $a(1+rac{r}{n})^{nt}$
- $Pe^{rt}$
- $a(1+rac{r}{2})^{2t}$
Compound interest is calculated only once a year.
Compound interest is calculated only once a year.
False (B)
What does the variable 'r' represent in the compound interest formula?
What does the variable 'r' represent in the compound interest formula?
growth rate
The formula for compound interest compounded continuously is ______.
The formula for compound interest compounded continuously is ______.
Match the compounding frequency with its corresponding formula:
Match the compounding frequency with its corresponding formula:
Flashcards
Simple Interest
Simple Interest
A fee calculated only on the initial amount borrowed or invested.
Compound Interest
Compound Interest
Interest calculated multiple times per year, making the amount grow faster.
Compound Interest Formula
Compound Interest Formula
The formula for calculating compound interest when the interest is compounded a specific number of times per year.
Continuously Compounded Interest Formula
Continuously Compounded Interest Formula
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Principal (P)
Principal (P)
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