$ 42.00 !

XLII

Forty two bucks !

$ 42.00 !

XLII

Forty two bucks !

Compound interest! I did this last year (:

Use this formula: * A=Pe^rt *(looks ugly here, I know). It's the continuous compound interest formula.

Know that **A **is your final amount of money after a certain amount of time; **P** is amount of money you start off with; **e** has a set numeric value (2.71...) it's on your calculator anyway!; **r **is the interest rate in decimal form; and finally,** t** is the time in years! The question usually should give you enough info to solve for at least one of these values.

In this example, you start with $5000, right? It compounds continuously at 3.5% for 12 years. That's what you know

So, you can insert your values in the formula: *A=Pe^rt *

*A = 5000e^(0.035)x(12)*

Put that in a calculator, and you should be fine. Remember: It's *compounded* interest, so the value should actually be increasing.

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