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In this video, we're going to be dealing with the concept of compound interest.
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And for those of you that need a refresher, just know that compound interest is the addition of interest to the principal sum of money in an account.
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And we usually calculate this by using a is equal to p times 1 plus r over m to the power of m times t.
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And we know that a is our accumulated interest at the end of t years.
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Principal amount, r is our nominal interest rate per year, and m is the number of conversion periods for year.
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Oh, and t is the number of years.
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So, in this question we are given that p is $12 ,000, a is $15 ,000, r is 5%, or 0 .05, and that this investment is compounded monthly, which means is compounded 12 times a year, giving us an end value of 12.
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What they want us to do here is to find and our t, or how long it'll take for this investment to grow to $15 ,000.
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And then we're going to go about this is by plugging in our knowns and solving for t.
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So we know that our a is $15 ,000.
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We know that our p is $12 ,000...