Section 6.7
Compound Interest

FIU has online movies to help with this topic on this page. You must have QuickTime Player, a free download, installed on your computer.

The University of Idaho provides another online resource. These lectures are only viewable by those with DSL or cable modems. Real Player, a free download, is required to see these videos. The videos cover the topics below. To see the videos, go to this page and look under section 6.7.
Compound interest when the interest is not compounded continuously
Compound interest when the interest is compounded continuously
Finding the present value of money

LSU has an online video. It is a very large file that may take up to 10-15 minutes to open even with a high speed connection.

All the problems in this section can be solved using the formulas in the colored boxes on pages 467 and 469. You use the formula on p. 469 when the problem includes the word “continuously.” In all other problems you use the formula on p. 467. 

It is important to remember that the interest rate r must be expressed as a decimal.  In other words, if the interest rate is 4%, r is 0.04.  If the interest rate is 3¼%, then r is 0.0325.

Also keep in mind that t must be expressed in years.  If the problem asks how much money is in the account at the end of 6 months, then t is ½, not 6.

Finally, do not confuse A and P.  P is the amount of money you are starting with.  A is the new, larger amount of money you end up with after the interest is added to the principal P.