Question

compound intrest formula! help

Answer 1

Do you know the formula for the sum to the nth term of a geometric progression?

Answer 2

well i know the formula, i just need some help putting my question into it

Answer 3

Suppose you have n periods of interest, and r being the rate of interest (i.e. your common ratio is (1+r)). Principle amount is P, (i.e. T(1) = P), and \[n \in \mathbb{Z}^+\]

Answer 4

ok well i have $10000 loan, for 5 years with 6% inrtrest

Answer 5

but im not sure how to put into the formula

Answer 6

In this case, P = 10000, n = 5 and r = 0.06 i.e. common ratio = 1.06
Plug that into the formula for the sum of a geometric progression.

Answer 7

This gives you the total amount you owe after 5 years

Answer 8

so do i use this?

Answer 9

\[p = (1 + \frac{ r }{ n }) nt\]

Answer 10

No.
\[A = P \times \frac{r^n - 1}{r-1}\]

Answer 11

In this case, plug in r = 1.06, P = 10000, n = 5

Answer 12

total = principal * (1 + rate) ^ years
but that is for investing
Here is a loan payment formula

That's from my website http://1728.org/loanform.htm

Answer 13

Why the the Sn formula flipped?

Answer 14

Or it's not even the Sn formula...

Answer 15

wait which formula do i use to find how much i would owe after 5 years at 6% intrest and starting amt of $10000

Answer 16

\[10000 x \frac{ 5^{0.06 - 1} }{ 5 - 1}\]

Answer 17

\[10000 \times \frac{1.06^5 - 1}{0.06}\]

Answer 18

Note that r = 1.06 while n = 5. You went the other way around.

Answer 19

muppz - you stated the loan is for 5 years.
Yet you also stated
which formula do i use to find how much i would owe after 5 years at 6% intrest and starting amt of $10000
So the loan is for more than 5 years?