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Compound interest

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The formula for the amount due on a loan is A= P (1+(r/m))^(mt)

Now in the question the time in years (t) is 6 years 9 months.
P= $17500 r=0.085

How do I write the time(t) in the equation?

Also, what if the time was 4 years 3 months, how would I write that for the time in years (t)?

Also, what does semiannually, monthly and continuously mean?

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Solution Summary

This explains how to use the compound interest equation for a loan.

Solution Preview

The choice of time (in year or in Month) depends on

the nature of compound periods.
If the amount P is compounded monthly, we should write

number of periods n = 6 year and 9 months into t = ...

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