Compound interest is interest earned on both the initial investment and the previously earned interest. an initial amount of money, the principal p 0, is invested in an account that pays an annual interest rate r (written as a decimal), compounded n times per year. the amount in the account at the end of each time period is the principal plus the interest.
for example, $1,000 is invested at a 2% interest rate and compounded quarterly. then p 0 = 1,000, r = 0.02, and n = 4.
select all that apply.
select the formulas that give the amount p in the account after the first period.
a. p = 1.005p0
b. p = 1.02p0
c. p = p0(0.02/4)
d. p = p0(1.02/4)
f. p = p0(1+ 0.02/4)