# The Deadbeatometer

Since we're figuring 5% interest compounded annually, here's how we're calculating the current annual balance, with the help of The Compound Interest Formula, via The Calculator Site's Compound Interest Calculator:

The formula for annual compound interest is **A = P (1 + r/n) ^ nt:**

**Where:**

**A =**the future value of the loan, including interest**P**= principal amount (the initial amount Paul borrowed) =**$4,500****r**= annual rate of interest (as a decimal) =**.05****n**= number of times the interest is compounded per year =**1****t**= number of years for which the amount is borrowed =**50**(Actuarially, Paul won't live much past 2053)

**P** = 4500. **r** = 5/100 = 0.05 (decimal). **n** = 1. **t** = 50.

If we plug those figures into the formula, we get:

**A = 4500 (1 + 0.05 / 1) ^ 1(50)** = 51,603.30

So, the debt balance after 50 years is $51,603.30

See the annual breakdown below:

(interest compounded **yearly** - added at the end of each year)