## msingh 2 years ago i didn't understand how it comes , can any body explain, plse go through the following link: http://www.jiskha.com/display.cgi?id=1364807092

1. mathslover

@msingh , let us first start with your introduction with compound interest formula. Can you tell me the formula for compound interest Msingh?

2. msingh

yes, i know theformula for CI

3. msingh

CI=A+P

4. mathslover

What is the formula for Amount?

5. msingh

A=P(1+r/100)

6. mathslover

\(A_n = P(1+\cfrac{R}{100})^n\)

7. mathslover

n = no. of times compounded ...

8. mathslover

Solve A for 8% interest first [n=1 as it is compounded annualy]

9. mathslover

^annually

10. msingh

k

11. phi

See http://en.wikipedia.org/wiki/Compound_interest#Compound_Interest for a formula

12. phi

the interest rate for 10% compounded semi-annually (i.e. twice a year) means you use rate= 0.10/2 the number of compoundings in one year is 2, so the formula is P (1+ r/(100*2))^(2*1) or P (1+0.05)^2

13. phi

the amount of principal plus interest for 8% compounded annually for one year is just P(1+0.08)^1 or P(1+0.08)

14. phi

if you had compounding monthly, for n years it would be P(1+r/(100*12))^(12*n)

15. mathslover

@msingh is your doubt clear now?

16. msingh

yeah, i have solved it ...but one thing i have doubt about this line AFTER 1 YEAR WOULD HAVE BEEN 225 MORE

17. mathslover

It means you have X apples today then after 1 year you will have 225 + X apples. I just gave you an example.

18. msingh

k,i got it

19. mathslover

On the place of apples, we are talking about amount here. Welcome msingh

20. msingh

@mathslover & @phi thank you so much