Answer
It appears that after n years, you will have
P(1 + R)n
dollars. In other words, at the end of each year your balance from the
previous year is multiplied by (1 + R). This makes
sense, since you retain your original balance and obtain a factor of
R more. Notice that this formula works even for
n = 0 (i.e., before any time has passed), at which
point you have P dollars.
Return to lesson.
Joseph L. Zachary
Hamlet Project
Department of Computer Science
University of Utah