SOLUTION: how to derive compound interest formula A= P(1+ r/n) ^nt to the formula of rate r= n[(A/P)^1/nt -1]. step by step on how to derive it

Algebra ->  Logarithm Solvers, Trainers and Word Problems -> SOLUTION: how to derive compound interest formula A= P(1+ r/n) ^nt to the formula of rate r= n[(A/P)^1/nt -1]. step by step on how to derive it      Log On


   

Question 1173087: how to derive compound interest formula A= P(1+ r/n) ^nt to the formula of rate r= n[(A/P)^1/nt -1]. step by step on how to derive it
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
how to derive compound interest formula A=+P%281%2B+r%2Fn%29%5E%28nt%29
P%281%2B+r%2Fn%29%5E%28nt%29+=+A
divide both sides by P
%281%2B+r%2Fn%29%5E%28nt%29+=+A%2FP
multiply the exponent by it's reciprocal, gets rid of the one on the left
1%2B+r%2Fn+=+%28A%2FP%29%5E%281%2F%28nt%29%29
subtract 1 from both sides
+r%2Fn+=+%28A%2FP%29%5E%281%2F%28nt%29%29-1
multiply both sides by n
+r+=+n%28%28A%2FP%29%5E%281%2F%28nt%29%29-1%29