Compound interest
8:01
Khan AcademySal Khan
Compound interest
In this video, we expand the equation to calculate simple interest for a single period, P*(1+r), to calculate interest when interest is charged for more than one period and that interest is compounded at different intervals. By doing so, we can better understand the difference between simple and compound interest.
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SOLVED: The amount of money in an account with continuously compounded interest is given by the formula A = P * e^(rt), where A is the principal, r is the annual interest rate, and t is the time in years. Calculate to the nearest hundredth of a year how long it takes for an amount of money to double if interest is compounded continuously at 6.2%. Round to the nearest tenth.
SOLVED: The amount of money in an account with continuously compounded interest is given by the formula A = P * e^(rt), where A is the principal, r is the annual interest rate, and t is the time in years. Calculate to the nearest hundredth of a year how long it takes for an amount of money to double if interest is compounded continuously at 6.2%. Round to the nearest tenth.
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