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**yorkmanz****Member**- Registered: 2019-01-12
- Posts: 13

hello

please i need help understanding both questions

use the compound interest formula a= p(1+i)^n to answer the following questions:

1:) what type of equation is present if n is constant equal to 1, rather than a variable?

2:) what type of equation is present if i, A, or P are constant rather than variable?

thanks

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**ganesh****Administrator**- Registered: 2005-06-28
- Posts: 28,275

Hi,

The compound interest formula:

orwhere A is the Amount, P is the Principal, r or i is rate of interest per period (e.g. per month, per quarter, per annum etc.).

1.) When i increases, and n also increases, A and P increase. When i decreases n also decreases, A and P decrease.

when i increases and n decreases, or vice versa, the change is caused dependent on the values.

2). Amount and Principal is dependent on i, as well as n.

It is no good to try to stop knowledge from going forward. Ignorance is never better than knowledge - Enrico Fermi.

Nothing is better than reading and gaining more and more knowledge - Stephen William Hawking.

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**yorkmanz****Member**- Registered: 2019-01-12
- Posts: 13

ganesh wrote:

Hi,

The compound interest formula:

orwhere A is the Amount, P is the Principal, r or i is rate of interest per period (e.g. per month, per quarter, per annum etc.).

1.) When i increases, and n also increases, A and P increase. When i decreases n also decreases, A and P decrease.

when i increases and n decreases, or vice versa, the change is caused dependent on the values.

2). Amount and Principal is dependent on i, as well as n.

thanks for replying...

for 1:) since n is constant i think its just Simple interest and principle

if

n = 1

=A = P(1+i)^n =

=P(1+i)^1

= P(1+i)

now we know that i = r/n

since r n=1,

i = r = interest rate

then we have A = P + P*i

i think its just Simple interest and principle and we have

now the This is a linear equation.

for 2:) TRICKY

if i is a constant, this is an exponential equation `a=b^n` where `b=P(1+i)` , `b` a constant. if (In this case, P is a parameter)

and so on for a, b

please correct me if i am wrong

thanks

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**ganesh****Administrator**- Registered: 2005-06-28
- Posts: 28,275

Hi yorkmanz,

Your reply (both parts) is correct.

It is no good to try to stop knowledge from going forward. Ignorance is never better than knowledge - Enrico Fermi.

Nothing is better than reading and gaining more and more knowledge - Stephen William Hawking.

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