Solution
The Compound Interest Formula
This calculator uses the compound interest formula to find principal plus interest. It uses this same formula to solve for principal, rate or time given the other known values. You can also use this formula to set up a compound interest calculator in Excel®1.
A = P(1 + r/n)^nt
(A)
First, convert R as a percent to r as a decimal
r = R/100
r = 1.12/100
r = 0.0112 rate per year,
Then solve the equation for A
A = P(1 + r/n)^nt
A = 3,900.00(1 + 0.0112/365)^(365)(2)
A = 3,900.00(1 + 3.0684931506849E-5)^(730)
A = $3,988.34
(B)
A = $3,988.34
A = P + I where
P (principal) = $3,900.00
[tex]\begin{gathered} I=A-P \\ I=3988.34-3900 \\ I=88.34 \end{gathered}[/tex]
I (interest) = $88.34
