Compound Interest (Leaving Cert Mathematics): Flashcards

Interest on principal + accumulated interest

Original amount invested

Percentage interest rate per year

Total value after interest added

$F = P(1 + i)^n$

Principal (starting amount)

Interest rate as a decimal

Time in years

$(1 + i)$

$1.04$

Rate = (Interest $\div$ Principal) $\times$ 100%

True annual rate when interest charged more frequently

When something loses value over time

Final value = Original value $\times (1 - \text{rate})^n$

Less than 1