Please help. Can you please explain in detail. Explain the concept of compound interest and its relation to exponential functions. One very important exponential equation is the compound-interest formula: A = P (1 + r/n) ^ (nt) Solution Exponential functions are used in variety of formulas.One such case is compound interest Compund interest is calculated by A(t) = P( 1+r/n)^nt where P ---principal amount invested r ----rate of ineterst n --- compounding number of times the interest is compounded per year ,whether yearly n=1, half yearly n= 2 , monthly n=12 t --- no. of years IfCompounded Continuously Interest: is calculated by the formula then we use another formula: A(t) = P e^rt Example : let the interest rate r be 4%, compounded monthly, and let the initial investment amount be $1200. Then the compound-interest equation, for an investment period oft years, becomes: A(t) = 1200( 1+ 4/12)^12t = 1200(1.33)^(12t).

1. Please help. Can you please explain in detail.
Explain the concept of compound interest and its relation to exponential functions.
One very important exponential equation is the compound-interest formula:
A = P (1 + r/n) ^ (nt)
Solution
Exponential functions are used in variety of formulas.One such case is compound interest
Compund interest is calculated by A(t) = P( 1+r/n)^nt
where P ---principal amount invested
r ----rate of ineterst
n --- compounding number of times the interest is compounded per year ,whether yearly n=1,
half yearly n= 2 , monthly n=12
t --- no. of years
IfCompounded Continuously Interest: is calculated by the formula then we use another formula:
A(t) = P e^rt
Example : let the interest rate r be 4%, compounded monthly, and let the initial investment
amount be $1200. Then the compound-interest equation, for an investment period oft years,
becomes:
A(t) = 1200( 1+ 4/12)^12t
= 1200(1.33)^(12t)