Here is an example of a compound interest problem. Remember to read the lesson on this topic.

Basic steps to follow:

1. First make sure you understand the formula and what the variables represent

2. Common areas to note: the “r” in the formula is the APR (annual interest rate) as expressed as a decimal not a percent

3. Also time is always expressed in terms of years- however time must always match the growth rate (interest rate)

4. Once plugging in your values into the formula you can end up with different types of equations to solve to include exponential equations which require logarithms to solve- make sure you know you algebra

Power and Exponents-compound-interest-1

Important habits to master math:

1. write out all steps

2. be very neat

3. use pencil not pen

4. review your work as your go

5. make sure you know the basics like fractions, positive and negative numbers and order of operations