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Compound interest

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Problem:

$4000 deposited at 12% interest compounded monthly will grow to $43570.22 in 20 years. What is the i, n, P, and F for this situation?

a. 12%; 20; $4000; 43570.22
b. 0.01; 20; $4000; $43570.22
c. 0.15; 240; $43570.22; $4000
d. 0.01; 240; $4000; $43,570.22
e. none of the above

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Solution Summary

This shows how to define variables in a word problem as they fit the interest equation.

Solution Preview

i = interest rate, % per period

N = number of time periods, no units

P = present ...

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