Simple Interestand
Compound Interest
Formulas
A P(1 rt )
I Prt
Simple Interest Future Value Formula
Interest Earned
Find the future value of $3670 deposited at 2¾% annual simple interest for 7 years.
How much must be deposited now at
annual simple interest so that in 2 years and 7 months an account will contain $3000?
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5
Formulas
A P 1 r
m
mt
Compound Interest Future Value Formula
When Mike Jones was born, his grandparents deposited $5,000 into a special account for Mike’s college education. The account earned 7¼ % interest compounded daily.
How much will be in the account when Mike is eighteen?
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