A teacher deposits $3,000 in a retirement fund. If she doesn't add any more money to the fund, which earns an annual interest rate of 6%, how much money would she have in 1 year?

$3,180 right? For those problems I do (3,000*0.06*1)/100 = I=PRT

My real question is - Is that the formula I can use every time?

Question

A teacher deposits $3,000 in a retirement fund. If she doesn't add any more money to the fund, which earns an annual interest rate of 6%, how much money would she have in 1 year?

$3,180 right? For those problems I do (3,000*0.06*1)/100 = I=PRT

My real question is - Is that the formula I can use every time?

amistre64 · Answer

there are at least 2 types interest calculations: simple and compounded.

amistre64 · Answer

for a compounded interest of n times a year, and for t year ...$$F=P(1+\frac{r}{n})^{nt}$$