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What is Compound Interest? Compound interest is interest that is compounded at certain intervals or earned continuously (all the time). Annually: A = P(1.

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Presentation on theme: "What is Compound Interest? Compound interest is interest that is compounded at certain intervals or earned continuously (all the time). Annually: A = P(1."— Presentation transcript:

1 What is Compound Interest? Compound interest is interest that is compounded at certain intervals or earned continuously (all the time). Annually: A = P(1 + r) t Compounded n times… : A = P(1 + r / n ) nt Continuously: A = Pe rt Rewrite the formula to solve for a variable

2 Wells Fargo has a CD that receives 6% interest and it is compounded monthly. How much will it be worth in 5 years if you deposit $800 in the account?

3 After 2 years, a savings account has a balance of $1172.60 and the interest rate was compounded monthly at 3.2%. What was the original amount deposited 2 years ago?

4 Suntrust Bank offers 7.5% interest on accounts with large deposits and the interest is compounded continuously. What is the amount earned on a deposit of $10,000 in 6 years.

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