P: Principal , amount o money borrowed
R: Rate of interest ( written as a decimal
N: Number of times compounded
Annually: 1
Semiannually: 2
Monthly: 12
Quarterly : 4
T: Time (always in years)
Things to Remember :
- There are 52 weeks in a year
- There are 365 days in a year
- There are 4 quarters in a year
Example: An amount of $1,500 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. What is the balance after 6 years?
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