Compound Interest

I am trying to figure out monthly compound interest... it starts at month one of an initial investment of 100$ and the rate is 7.5%... the balance at the end of the month is 100.6250000 and at the end of the second month it is 201.8789063 and in ten years it would be 17904.2406578.... etc.... How in the world do you come up with that formula?

Answers
mm well something seems to be amiss with your calculations.
fiaraz
27 April 2012
your initial monthly interest rate us 7.5/12= 0.625
fiaraz
27 April 2012
convert to a decimal 0.625 divide by 100= 0.00625
fiaraz
27 April 2012
oh i dont know what has happened to the font!
fiaraz
27 April 2012
if you want the total amount after the first month then 100 x 1
fiaraz
27 April 2012
any way atthe end of teh second month the way to work it out would be 100 x 1.00625^2 which would give $101.2539
fiaraz
27 April 2012
so after 10 years you would have 100 x 1.00625^100 which would give $186.461
fiaraz
27 April 2012
do you know i have just tried to work out why your calculations were so far out. In your scenario you haveto put $100 in every month. to solve that kind of question you want to use the sum of a geometric sequence sn =a(r^n=1)/r-1 sub in teh ratio etc etc and that should give you teh answer. if you require further info please feel free to get in touch
fiaraz
27 April 2012
I will definately try that... My instructor gave me three pages of calculations and I have to write a program in C# that would give me the corresponding numbers so the outcomes are predetermined, I looked at like 4 different websites that gave me a formula for calculating compound interest and everything that I was trying wasn't giving me the accurate output (corresponding to the three pages of data that was provided) so, thanks for the feedback.
csevan
28 April 2012
i set this for homework for a year 12 class, the answer has been posted at mathsandscience.net
fiaraz
28 April 2012
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