CH 3 Formulas for MAT 112
Simple Interest:
A = P + Prt
or
A = P(1 + rt)
Compound Interest:
A = P(1 + i)n or A = P ( 1 + ) mt
A = Pert
Annual Percentage Yield:
APY = ( 1 +
KEY:
I = Interest
P = Principal
r = rate ( as a decimal )
t = time in years
A = Amount or future value
m = number of compounding periods
per year
i = rate per compounding period (r/m)
n = total # of compounding periods ( m·t )
APY = annual percentage yield
e ≈ 2.7183… (there is a calculator key for it)
)m – 1
APY = er – 1
___________________________________________________________________
Annuities:
FV =
PMT =
PV =
PMT =
(Sinking fund payment)
KEY:
FV = future value
PMT = periodic payment
PV = present value
r = rate ( as a decimal )
t = time in years
m = number of compounding periods
per year
i = rate per period (r/m)
n = # of payments or periods ( m·t )
(amortization formula)