### Blog-103

Now we will see the problem of compound interest.

Formula:

A = Total amount, P = principal or amount of money deposited or borrowed, r = annual interest rate (in decimal form), n = number of times compounded per year, t = time in years.

Example 1: If you deposit $7000 into an account paying 5 % annual interest compounded bimonthly, how much money will be in the account after 6 years? What is total interest for 6 years? As per the calculation of compound interest, what is total interest per year and what is the rate of interest pcpa?

Solution:

Given:

Principal P = 7000, Rate of interest r = 0.05, n = 2 (as the interest is calculated bi-monthly) and t = 6.

Here we can use logarithm to do these calculations. see the following steps carefully.

The final result is as follows:

Now see the software tool for getting these results systematically. Click on following figure and try the result for your values.

ANIL SATPUTE