Question

What are the formulas for simple interest and compound interest?

Accepted Answer

Simple interest: $$I=P \cdot r \cdot t$$, where   
*I=interest*, *P=principal*, *r=rate of interest*, and *t=time*   

Compound interest: $$FV=PV (1+r)^t$$, where    
*FV=future value*, *PV=present value*, *r=rate of interest*, *t=time in years*

Flashcard 6 - Quantitative Flashcard Set for the GMAT

Front