Question

Need help applying compound interest formula:

Answer 1

to what?

Answer 2

H! So I have to apply the formula to a pretend product. The product costs 988.00 and has a 29.99% interest rate. I need to find how much my balence will be at the end of the deferment period.

Answer 3

B = ( P (1 + i)^nt ) So I will use this formula.. B= unknown
P=988
i= rate/number of compounding periods per year = .2999/12
(the interest is compounded monthly)
t= 2.75
(I have a "2 year 9 month deferment promo plan")

Answer 4

Here is where I am
B=988 (1+.2999)^33
B= 5672638

This doesn't seem possible, what am I doing wrong?

Answer 5

Are you sure it's not 0.2999%

a 29.99 % rate of interest is highly unrealistic XD

Answer 6

"or new accounts: Purchase APR is 29.99%; "

Answer 7

I see... hang on.
Actual formula if memory serves is this:
\[\Large B = P \left(1+\frac{r}{n}\right)^{nt}\]
But you forgot to divide 0.2999 by 12...

Answer 8

ahh, jeez! Thanks! So the balence should be 2231.15

Answer 9

Does that seem more realistic to you? :D