Skip Navigation Links
Algebra I: Compound interest
To enroll in any of our courses, click here
Compound interest

Compound interest is interest calculated on the principal amount plus the accumulated interest of prior periods.

Compound interest can be calculated on daily, monthly, quarterly, half-yearly or yearly basis. Generally more times an amount is compounded, more money can be made.

P = Principal (the initial amount you borrow or deposit)
r = Annual rate of interest(as a decimal) 
n = Number of times the interest is compounded per year
t = Number of years the amount is deposited or borrowed for
A = Amount accumulated after n years, including interest.

              A = P(1 + r/n)nt

People who saw this lesson also found the
following lessons useful:
Finding the values of Trigonometric Ratios
Slope Intercept Form
Characteristic Properties of Similarity
Internal Bisector of an Angle of a Triangle
Example: An amount of $2,400 is borrowed from bank at an annual interest rate of 4.3%, compounded quarterly. Find the amount to be deposited after 6 years.
Solution: Given,
P = $2,400
r = 4.3% = 4.3/100 = 0.043
n = 4
t = 6
= P(1 + r/n)nt
= 2400(1 + 0.043/4)4(6)
= 2400(4.043/4)24
= $3102.14(approx.)
The amount to be deposited after 6 years is $3102.14 approximately.

As many of you know, Winpossible's online courses use a unique teaching method where an instructor explains the concepts in any given area to you in his/her own voice and handwriting, just like you see your teacher explain things to you on a blackboard in your classroom. All our courses include teacher's instruction, practice questions as well as end-of-lesson quizzes for practice. You can enroll in any of our online courses by clicking here.

The format of Winpossible's online courses is also very suitable for teachers who are using an interactive whiteboard such as Smartboard on Promethean in their classrooms, because the course lessons can be easily displayed on such interactive whiteboards. Volume pricing is available for schools interested in our online courses. For more information, please contact us at

 Copyright © Winpossible, 2010 - 2011
Best viewed in 1024x768 & IE 5.0 or later version