Rate of Increase / Decrease or % Interest Equation

• Total = initial * (1 + rate)ᵗᶦᵐᵉ => increase (rate is a decimal, time is in years)

• Total = initial * (1 - rate)ᵗᶦᵐᵉ => decrease (rate is a decimal, time is in years)

EXAMPLES

• An initial investment of $100 increased annually by 5%. How much was there after 2 years?

T = 100(1 + 0.05)²

• An initial investment of $100 decrease annually by 5%. How much was there after 3 years?

T = 100(1 - 0.05)³

• An initial investment of $100 increased monthly by 5%. How much was there after 2 years?

T = 100(1 + 0.05/12)²