How Do You Use the Formula for Compound Interest?

Note:

If you already have a bank account or if you plan to have one in the future, then this tutorial is a must see! Follow along as this tutorial goes through a word problem involving compound interest.

Keywords:

compound interest
interest
principal
principal plus past interest
new balance
over time
compound

Background Tutorials

Evaluate expressions at specific values of their variables. Include expressions that arise from formulas used in real-world problems. Perform arithmetic operations, including those involving whole-number exponents, in the conventional order when there are no parentheses to specify a particular order (Order of Operations).
- How Do You Evaluate an Algebraic Expression?
  
  Plugging variables into an expression is essential for solving many algebra problems. See how to plug in variable values by watching this tutorial.
- What is a Variable?
  
  You can't do algebra without working with variables, but variables can be confusing. If you've ever wondered what variables are, then this tutorial is for you!
- What's the Order of Operations?
  
  Check out this tutorial where you'll see exactly what order you need to follow when you simplify expressions. You'll also see what happens when you don't follow these rules, and you'll find out why order of operations is so important!
Use the properties of exponents to interpret expressions for exponential functions.
- What is the Formula for Compound Interest?
  
  Things like bank accounts, loans, investments, and mortgages are a part of life, and almost always, interest is involved. Sometimes, you need to deal with compound interest, so it would be good to know the formula for it! In this tutorial, you'll see the formula for compound interest. Take a look!