The standard formula for an interest-gaining investment (such as a certificate of deposit) is v=pit (end value equals pricipal times interest times time). However, that foruma only holds if the interest only piles once per year. If the interest piles multiple times per year, such as quarterly, then there's a complex formula where if the number if times the interest piles equals one, then it simplifies into v=pit, and if the interest piles continuously, then there's a REALLY weird formula that uses the constant e.

 

What are these formulas? It's been several months since I've taken that class, so I've long forgotten.

http://math2.org/math/general/interest.htm

Here you go.

 

http://www.math.temple.edu/~agodfrey/math55formulasheet.pdf

math55formulasheet.pdf

So in the equation in the top, right hand corner, what does P, APR, and Y stand for?

So in the equation in the top, right hand corner, what does P, APR, and Y stand for?

 

Dude, just read the link. Right above where it says "Savings Plan Formula" this is explained. Is it not showing up on your screen?

 

 

 

 

 

 

In both of the equations above: P=starting principal, APR=annual percentage rate, n=number of compounding periods per year, Y=number of years, and A=accumulated balance.

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