SIMPLE, COMPOUND AND CONTINUOUSLY COMPOUNDING INTERESTS Flashcards
1
Q
F = Pe^((i^m)(t))
A
Continuous Compounding
2
Q
i^m / m = ___
A
j (rate of interest for each conversion period)
3
Q
total # of conversion periods
A
n
4
Q
of conversion periods in a year
A
m
5
Q
unit of time (in years)
A
t
6
Q
P = F / (1 + j) ^ n
A
Compounding more than once a year
7
Q
F = P (1 + j) ^ n
A
Compounding more than once a year
8
Q
n = __
A
mt
9
Q
interest that remains constant
A
simple interest (I_s)
10
Q
interest wherein past interests gain interest
A
compound interest (I_c)
11
Q
rate when compounded annually will give same compound each year with nominal rate
A
effective rate
12
Q
annual interest rate
A
nominal rate
13
Q
i^m
A
nominal rate
14
Q
i^1
A
effective rate
15
Q
(P)(r)(t) = ___
A
I_s
