Math 147 Section 6.2. Application Example
|
|
- Jonas Washington
- 5 years ago
- Views:
Transcription
1 Math 147 Section 6.2 Annual Percentage Yield Doubling Time Geometric Sequences 1 Application Example Mary Stahley invested $2500 in a 36-month certificate of deposit (CD) that earned 9.5% annual simple interest. When the CD matured, she invested the full amount in a mutual fund that had an annual growth equivalent to 20% compounded annually. After 7 years in the mutual fund, how much was her investment worth? 2 1
2 In interest, the interest for each period is added to the principal before interest is calculated for the next period. 3 10,000 invested at 10% per year compounded annually: Year Beginning Principal Interest Ending Principal Note that the amount of interest earned each year is greater than the year before. Notice that the principal at the end of each year is 1.10 times the principal at the beginning of the year. 4 2
3 10,000 invested at 10% per year compounded annually: Year Beginning Principal Interest Ending Principal , Notice that the principal at the end of each year is 1.10 times the principal at the beginning of the year. 10,000 * 1.10 = 11,000 11,000 * 1.10 = 12,100 12,100 * 1.10 = 13, ,000 * 1.10 = 11,000 = 10,000 * 1.10 = 10,000 * ,000 * 1.10 = 12,100 = 10,000 * 1.10 * 1.10 = 10,000 * ,100 * 1.10 = 13,310 = 10,000 * 1.10 * 1.10 * 1.10 = 10,000 * In general if P is invested at an annual rate r compounded annually, the future value, S, at the end of the n th year is 6 3
4 Find the future value of $5000 invested for 10 years at 5% per year compounded annually: 7 Interest compounded annually grows more than simple interest that is paid once at the end of the term. Frequent compounding is good for the investor. The the compounding, the grows. 8 4
5 In general interest rates, r, are stated as annual rates, but interest is often compounded quarterly, monthly, or even daily. The annual rate, r, is the. The, is the nominal rate divided by the number of compounding periods per year. The number of, also called conversion periods, is denoted by n. 9 If P is invested for t years at a nominal interest rate r, compounded m times a year: The total number of compounding periods is The interest rate per compounding period is (expressed as decimal) And future value is 10 5
6 Find the future value of $5000 invested for 10 years at 5% per year compounded annually: Find the future value of $5000 invested for 10 years at 5% per year compounded quarterly: 11 Continuous Compounding The more often we compound, the more we earn; it would seem that if we compounded continuously, we would break the bank. If we invest $1 at 100% annual rate for one year, and the interest is compounded m times a year the future value is: Compounded Annually Monthly Daily Hourly Each Minute Number of periods Future value 12 6
7 Continuous Compounding If we invest $1 at 100% annual rate for one year, and the interest is compounded m times a year the future value is: Compounded Number Future value of periods Annually 1 (1+1/1) 1 = 2 Monthly 12 (1+1/12) 12 = Daily 360 (1+1/360) 360 = Hourly 8640 (1+1/8640) 8640 = Each Minute 518,400 (1+1/518400) = As we continue this process the value increases, but not very fast. In fact the value gets very close to but doesn t quite reach This is one place that the number e occurs naturally. 13 Continuous Compounding In general if $P is invested for t years at nominal rate r compounded continuously the future value is: 14 7
8 Continuous Compounding Find the future value of $5000 invested for 10 years at 5% per year compounded annually: Find the future value of $5000 invested for 10 years at 5% per year compounded quarterly: Find the future value of $5000 invested for 10 years at 5% per year compounded continuously: 15 Annual Percentage Yield We earn more than the nominal annual rate when interest is compounded more frequently that once a year. If we invest $1 at 5% compounded quarterly, in one year our value is: So in one year our $1 earned $ or 5.1%. This is our. For compounding periods of 1 year, the nominal rate is the APY. 16 8
9 Annual Percentage Yield For periodic compounding APY is calculated: For continuous compounding APY is calculated: We can t directly compare two nominal rates with different compounding periods, but we can compare their APYs. 17 APY Suppose a young couple found three different investment companies that offered college savings plans: (a) one at 10% compounded annually (b) another at 9.8% compounded quarterly (c) a third at 9.65% compounded continuously. Find the annual percentage yield (APY) for each of these three plans to discover which plan is best. 18 9
10 APY Suppose a young couple found three different investment companies that offered college savings plans: (a) one at 10% compounded annually 19 APY Suppose a young couple found three different investment companies that offered college savings plans: (b) another at 9.8% compounded quarterly 20 10
11 APY Suppose a young couple found three different investment companies that offered college savings plans: (c) a third at 9.65% compounded continuously. Find the annual percentage yield (APY) for each of these three plans to discover which plan is best. 21 Doubling Time How long does it take an investment of $5000 at 6% compounded quarterly to double? 22 11
12 Geometric Sequences If we invest P at a rate of i per period, compounded at the end of each period, the future value at the end of each succeeding period is: P(1+i), P(1+i) 2, P(1+i) 3,, P(1+i) n, The future value for each period forms a sequence in which each term, after the first, is found by the previous term by the same number. This type of sequence is a. 23 Geometric Sequences A sequence is a geometric sequence, or, if there is a number r, called a, such that: for n >
13 Geometric Sequences What are the next three terms of 5, 25, Geometric Sequences The n th term of a geometric sequence is where a 1 is the first term of the sequence. The sum of the first n terms of a geometric sequence with the first term a 1 and common ratio r is: 26 13
14 Geometric Sequences Find the sum of the first 6 terms of the geometric sequence with first term 1 and common ratio of Application Example Mary Stahley invested $2500 in a 36-month certificate of deposit (CD) that earned 9.5% annual simple interest. When the CD matured, she invested the full amount in a mutual fund that had an annual growth equivalent to 20% compounded annually. After 7 years in the mutual fund, how much was her investment worth? 28 14
15 Application Example Mary Stahley invested $2500 in a 36-month certificate of deposit (CD) that earned 9.5% annual simple interest. When the CD matured, she invested the full amount in a mutual fund that had an annual growth equivalent to 20% compounded annually. After 7 years in the mutual fund, how much was her investment worth? 29 15
Chapter 21: Savings Models
October 14, 2013 This time Arithmetic Growth Simple Interest Geometric Growth Compound Interest A limit to Compounding Simple Interest Simple Interest Simple Interest is interest that is paid on the original
More informationMath 1130 Exam 2 Review SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
Math 1130 Exam 2 Review Provide an appropriate response. 1) Write the following in terms of ln x, ln(x - 3), and ln(x + 1): ln x 3 (x - 3)(x + 1) 2 1) 2) Write the following in terms of ln x, ln(x - 3),
More informationChapter 4: Section 4-2 Annuities
Chapter 4: Section 4-2 Annuities D. S. Malik Creighton University, Omaha, NE D. S. Malik Creighton University, Omaha, NE () Chapter 4: Section 4-2 Annuities 1 / 24 Annuities Suppose that we deposit $1000
More informationFinite Math APY and Annuities 20 February / 15
APY and Annuities Finite Math 20 February 2017 Finite Math APY and Annuities 20 February 2017 1 / 15 Quiz If some amount of money is deposited into a savings account with interest compounded biweekly,
More information5= /
Chapter 6 Finance 6.1 Simple Interest and Sequences Review: I = Prt (Simple Interest) What does Simple mean? Not Simple = Compound I part Interest is calculated once, at the end. Ex: (#10) If you borrow
More informationA Formula for Annuities
A Formula for Annuities We ve seen that, with a bit of work, an annuity can be priced by summing geometric sequence. If we apply the geometric sum to a general annuity, we get a formula for annuities:
More informationMoney Math for Teens. Introduction to Earning Interest: 9th and 10th Grades Version
Money Math for Teens Introduction to Earning Interest: 9th and 10th Grades Version This Money Math for Teens lesson is part of a series created by Generation Money, a multimedia financial literacy initiative
More informationSection Compound Interest. Copyright 2013, 2010, 2007, Pearson, Education, Inc.
Section 11.3 Compound Interest INB Table of Contents Date Topic Page # June 15, 2015 Section 11.3 Examples 32 June 15, 2015 Section 11.3 Notes 33 2.3-2 What You Will Learn Compound Interest Present Value
More informationChapter 3 Mathematics of Finance
Chapter 3 Mathematics of Finance Section R Review Important Terms, Symbols, Concepts 3.1 Simple Interest Interest is the fee paid for the use of a sum of money P, called the principal. Simple interest
More informationMATH 111 Worksheet 21 Replacement Partial Compounding Periods
MATH 111 Worksheet 1 Replacement Partial Compounding Periods Key Questions: I. XYZ Corporation issues promissory notes in $1,000 denominations under the following terms. You give them $1,000 now, and eight
More informationInterest: The money earned from an investment you have or the cost of borrowing money from a lender.
8.1 Simple Interest Interest: The money earned from an investment you have or the cost of borrowing money from a lender. Simple Interest: "I" Interest earned or paid that is calculated based only on the
More informationSection 5.2 Future Value of an Annuity. Geometric Sequence. Example 1. Find the seventh term of the geometric sequence 5, 20, 80, 320,
Section 5.2 Future Value of an Annuity Geometric Sequence a 1, a 1 r, a 1 r 2, a 1 r 3,, a 1 r n 1 n th term of the sequence: a n = a 1 r n 1 Common Ratio: r = a term the preceding term Example 1. Find
More informationP+I= Simple Interest : I Prt I= /2. =$z048. part. Complex. Bought F- $ =19. invested at the beginning. Simple.
One Chapter 6 Finance 61 Simple Interest and Sequences Review: I Prt (Simple Interest) What does Simple mean? Simple - Complex Compound part than More Ex: (#10) If you borrow $1600 for 2 years at 14% annual
More informationIntroduction to Earning Interest: APR, APY and Compound Interest
Principal and Interest Example 1 Michael is saving money to buy a car. He takes $8,000 to the bank and opens an annual CD upon which the bank agrees to pay him 2% interest. Principal = 8000 Term = 1 year
More informationQuantitative Literacy: Thinking Between the Lines
Quantitative Literacy: Thinking Between the Lines Crauder, Evans, Johnson, Noell Chapter 4: Personal Finance 2011 W. H. Freeman and Company 1 Chapter 4: Personal Finance Lesson Plan Saving money: The power
More informationFinding the Sum of Consecutive Terms of a Sequence
Mathematics 451 Finding the Sum of Consecutive Terms of a Sequence In a previous handout we saw that an arithmetic sequence starts with an initial term b, and then each term is obtained by adding a common
More informationUnit 7 Exponential Functions. Name: Period:
Unit 7 Exponential Functions Name: Period: 1 AIM: YWBAT evaluate and graph exponential functions. Do Now: Your soccer team wants to practice a drill for a certain amount of time each day. Which plan will
More informationSection 3.5: COMPOUND INTEREST FORMULA
Section 3.5: COMPOUND INTEREST FORMULA OBJECTIVES Become familiar with the derivation of the compound interest formula. Make computations using the compound interest formula. Key Terms compound interest
More informationSAVINGS. Maximizing your Return
SAVINGS Maximizing your Return Savings Setting aside money for future use Discretionary income (aka disposable income): the amount of money left over after all obligations have been met Gross Pay Taxes
More informationMath116Chap10MathOfMoneyPart2Done.notebook March 01, 2012
Chapter 10: The Mathematics of Money PART 2 Percent Increases and Decreases If a shirt is marked down 20% and it now costs $32, how much was it originally? Simple Interest If you invest a principle of
More informationMathematics for Economists
Department of Economics Mathematics for Economists Chapter 4 Mathematics of Finance Econ 506 Dr. Mohammad Zainal 4 Mathematics of Finance Compound Interest Annuities Amortization and Sinking Funds Arithmetic
More informationPage Points Score Total: 100
Math 1130 Spring 2019 Sample Midterm 3a 4/11/19 Name (Print): Username.#: Lecturer: Rec. Instructor: Rec. Time: This exam contains 9 pages (including this cover page) and 9 problems. Check to see if any
More informationrichard/math101
1. Personal Finance Lecture Notes Continued Professor Richard Blecksmith richard@math.niu.edu Dept. of Mathematical Sciences Northern Illinois University http://math.niu.edu/ richard/math101 2. Investment
More informationMA162: Finite mathematics
MA162: Finite mathematics Paul Koester University of Kentucky December 4, 2013 Schedule: Web Assign assignment (Chapter 5.1) due on Friday, December 6 by 6:00 pm. Web Assign assignment (Chapter 5.2) due
More informationSIMPLE AND COMPOUND INTEREST
SIMPLE AND COMPOUND INTEREST 8.1.1 8.1.3 In Course 2 students are introduced to simple interest, the interest is paid only on the original amount invested. The formula for simple interest is: I = Prt and
More informationChapter 03 - Basic Annuities
3-1 Chapter 03 - Basic Annuities Section 3.0 - Sum of a Geometric Sequence The form for the sum of a geometric sequence is: Sum(n) a + ar + ar 2 + ar 3 + + ar n 1 Here a = (the first term) n = (the number
More informationAnnuities and Income Streams
Annuities and Income Streams MATH 151 Calculus for Management J. Robert Buchanan Department of Mathematics Summer 212 Objectives After completing this lesson we will be able to: determine the value of
More informationSection 4B: The Power of Compounding
Section 4B: The Power of Compounding Definitions The principal is the amount of your initial investment. This is the amount on which interest is paid. Simple interest is interest paid only on the original
More informationSequences (Part 3) Supplemental Material Not Found in You Text
Motivating Examples Math 34: Spring 2016 Sequences (Part 3) Supplemental Material Not Found in You Text Geometric Sequences will help us answer the following: An interest-free loan of $12, 000 requires
More informationGEOMETRIC PROGRESSION - Copyright: https://qualifications.pearson.com/en/qualifications/edexcel-gcses/mathematics-2015.
GEOMETRIC PROGRESSION - Copyright: www.pearson.com https://qualifications.pearson.com/en/qualifications/edexcel-gcses/mathematics-2015.html A24 RECOGNISE AND USE SEQUENCES OF TRIANGULAR, SQUARE AND CUBE
More informationc) George decides to make $80 payments into the account. How much money would he have?
Pay serious attention to this section. This is the one that will most likely be useful in real life. Def: An annuity is a sequence of payments made at regular time intervals. Def: A sinking fund is an
More informationAnswers are on next slide. Graphs follow.
Sec 3.1 Exponential Functions and Their Graphs November 27, 2018 Exponential Function - the independent variable is in the exponent. Model situations with constant percentage change exponential growth
More informationAnswers are on next slide. Graphs follow.
Sec 3.1 Exponential Functions and Their Graphs Exponential Function - the independent variable is in the exponent. Model situations with constant percentage change exponential growth exponential decay
More informationm
Chapter 1: Linear Equations a. Solving this problem is equivalent to finding an equation of a line that passes through the points (0, 24.5) and (30, 34). We use these two points to find the slope: 34 24.5
More informationSequences, Series, and Limits; the Economics of Finance
CHAPTER 3 Sequences, Series, and Limits; the Economics of Finance If you have done A-level maths you will have studied Sequences and Series in particular Arithmetic and Geometric ones) before; if not you
More informationFinancial Maths: Interest
Financial Maths: Interest Basic increase and decrease: Let us assume that you start with R100. You increase it by 10%, and then decrease it by 10%. How much money do you have at the end? Increase by 10%
More informationActivity 1.1 Compound Interest and Accumulated Value
Activity 1.1 Compound Interest and Accumulated Value Remember that time is money. Ben Franklin, 1748 Reprinted by permission: Tribune Media Services Broom Hilda has discovered too late the power of compound
More informationSection Compound Interest
Section 5.1 - Compound Interest Simple Interest Formulas If I denotes the interest on a principal P (in dollars) at an interest rate of r (as a decimal) per year for t years, then we have: Interest: Accumulated
More informationrichard/math101
1. Personal Finance Lecture Notes Professor Richard Blecksmith richard@math.niu.edu Dept. of Mathematical Sciences Northern Illinois University http://math.niu.edu/ richard/math101 2. Percents Definition
More informationYear Years Since 2004 Account Balance $50, $52, $55,
Exponential Functions ACTIVITY 2.6 SUGGESTED LEARNING STRATEGIES: Shared Reading, Summarize/Paraphrase/Retell, Create Representations, Look for a Pattern, Quickwrite, Note Taking Suppose your neighbor,
More information6.1 Simple Interest page 243
page 242 6 Students learn about finance as it applies to their daily lives. Two of the most important types of financial decisions for many people involve either buying a house or saving for retirement.
More informationPreparing to Invest Quizzes Answer Key (* denotes correct answer)
Preparing to Invest Quizzes Answer Key (* denotes correct answer) Quiz 1: Saving and Investing Basics, part 1 1. Saving and investing are two terms for the same concept a. True * 2. Saving is the act of
More informationMathematics Department A BLOCK EXAMINATION CORE MATHEMATICS PAPER 1 SEPTEMBER Time: 3 hours Marks: 150
Mathematics Department A BLOCK EXAMINATION CORE MATHEMATICS PAPER 1 SEPTEMBER 2014 Examiner: Mr S B Coxon Moderator: Mr P Stevens Time: 3 hours Marks: 150 PLEASE READ THE INSTRUCTIONS CAREFULLY 1. This
More informationSection 5.1 Simple and Compound Interest
Section 5.1 Simple and Compound Interest Question 1 What is simple interest? Question 2 What is compound interest? Question 3 - What is an effective interest rate? Question 4 - What is continuous compound
More informationWeek in Review #7. Section F.3 and F.4: Annuities, Sinking Funds, and Amortization
WIR Math 166-copyright Joe Kahlig, 10A Page 1 Week in Review #7 Section F.3 and F.4: Annuities, Sinking Funds, and Amortization an annuity is a sequence of payments made at a regular time intervals. For
More informationChapter 12. Sequences and Series
Chapter 12 Sequences and Series Lesson 1: Sequences Lesson 2: Arithmetic Sequences Lesson 3: Geometry Sequences Lesson 4: Summation Notation Lesson 5: Arithmetic Series Lesson 6: Geometric Series Lesson
More informationSections F.1 and F.2- Simple and Compound Interest
Sections F.1 and F.2- Simple and Compound Interest Simple Interest Formulas If I denotes the interest on a principal P (in dollars) at an interest rate of r (as a decimal) per year for t years, then we
More informationMath 1130 Final Exam Review SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
Math 0 Final Exam Review SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. Provide an appropriate response. ) Solve: x - - x + 2 = x - 27 ) 2) Solve: (0-2x)(5
More informationHSC Mathematics DUX. Sequences and Series Term 1 Week 4. Name. Class day and time. Teacher name...
DUX Phone: (02) 8007 6824 Email: info@dc.edu.au Web: dc.edu.au 2018 HIGHER SCHOOL CERTIFICATE COURSE MATERIALS HSC Mathematics Sequences and Series Term 1 Week 4 Name. Class day and time Teacher name...
More informationEngineering Economy Chapter 4 More Interest Formulas
Engineering Economy Chapter 4 More Interest Formulas 1. Uniform Series Factors Used to Move Money Find F, Given A (i.e., F/A) Find A, Given F (i.e., A/F) Find P, Given A (i.e., P/A) Find A, Given P (i.e.,
More information7-3 Exponential Review I can apply exponential properties and use them I can model real-world situations using exponential functions Warm-Up 1. Find the next three terms in the sequence 2, 6, 18, 54,,,
More informationSHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
Math 131-03 Practice Questions for Exam# 2 SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 1) What is the effective rate that corresponds to a nominal
More informationLesson Exponential Models & Logarithms
SACWAY STUDENT HANDOUT SACWAY BRAINSTORMING ALGEBRA & STATISTICS STUDENT NAME DATE INTRODUCTION Compound Interest When you invest money in a fixed- rate interest earning account, you receive interest at
More information7-4. Compound Interest. Vocabulary. Interest Compounded Annually. Lesson. Mental Math
Lesson 7-4 Compound Interest BIG IDEA If money grows at a constant interest rate r in a single time period, then after n time periods the value of the original investment has been multiplied by (1 + r)
More informationCompound Interest: Present Value
8.3 Compound Interest: Present Value GOL Determine the present value of an amount being charged or earning compound interest. YOU WILL NEED graphing calculator spreadsheet software LERN BOUT the Math nton
More information7 th Grade Math STAAR Review Booklet
7 th Grade Math STAAR Review Booklet Reporting Category 4 Student Name: Teacher Name: 1 2 Table of Contents Reporting Category 4 Sales Tax and Income Tax.4-9 Personal Budget.10-13 Net Worth Statement 14-16
More informationCHAPTER 4 SIMPLE AND COMPOUND INTEREST INCLUDING ANNUITY APPLICATIONS. Copyright -The Institute of Chartered Accountants of India
CHAPTER 4 SIMPLE AND COMPOUND INTEREST INCLUDING ANNUITY APPLICATIONS SIMPLE AND COMPOUND INTEREST INCLUDING ANNUITY- APPLICATIONS LEARNING OBJECTIVES After studying this chapter students will be able
More informationMA 162: Finite Mathematics
MA 162: Finite Mathematics Fall 2014 Ray Kremer University of Kentucky December 1, 2014 Announcements: First financial math homework due tomorrow at 6pm. Exam scores are posted. More about this on Wednesday.
More informationTotal 100
MATH 111 Final Exam Winter 2015 Name Student ID # Section HONOR STATEMENT I affirm that my work upholds the highest standards of honesty and academic integrity at the University of Washington, and that
More informationTexas Credit Opening/Closing Date: 7/19/08 08/18/08
Anatomy of a Credit Card Statement The following is a monthly statement from a typical credit card company. Parts left out intentionally are denoted by??? and highlighted in gray. Texas Credit Opening/Closing
More informationStats for Exam 1. Letter Score Range Frequency A 90 to B 80 to 89 3 C 70 to 79 4 D 60 to 69 4 F 59 and below 8
Stats for Exam 1 Letter Score Range Frequency A 90 to 100 14 B 80 to 89 3 C 70 to 79 4 D 60 to 69 4 F 59 and below 8 High Score 100 two of them 75th percentile 94 Median 81 25th percentile 60 Low Score
More informationChapter 3 Mathematics of Finance
Chapter 3 Mathematics of Finance Section 2 Compound and Continuous Interest Learning Objectives for Section 3.2 Compound and Continuous Compound Interest The student will be able to compute compound and
More informationPRACTICE PROBLEMS PARK, BAE JUN
PRACTICE PROBLEMS PARK, BAE JUN Natural Logarithm Math114 Section0 & 08 (1) Suppose you deposit $1000 in a bank account and interest is compounded times per year at annual interest rate %. Find the balance
More informationIB SL EXAM REVIEW and PRACTICE
IB SL EXM REVIEW and PRCTICE Topic: Sequence and Series; Binomial Expansion Look through Chapter 2(Sequence and Series) and Chapter 7(Binomial Expansion). The self tutor on your CD-Rom may be helpful.
More informationMath 1324 Finite Mathematics Chapter 4 Finance
Math 1324 Finite Mathematics Chapter 4 Finance Simple Interest: Situation where interest is calculated on the original principal only. A = P(1 + rt) where A is I = Prt Ex: A bank pays simple interest at
More informationMATH 1012 Section 6.6 Solving Application Problems with Percent Bland
MATH 1012 Section 6.6 Solving Application Problems with Percent Bland Office Max sells a flat panel computer monitor for $299. If the sales tax rate is 5%, how much tax is paid? What is the total cost
More informationLesson 39 Appendix I Section 5.6 (part 1)
Lesson 39 Appendix I Section 5.6 (part 1) Any of you who are familiar with financial plans or retirement investments know about annuities. An annuity is a plan involving payments made at regular intervals.
More informationMy Notes CONNECT TO HISTORY
SUGGESTED LEARNING STRATEGIES: Shared Reading, Summarize/Paraphrase/Retell, Create Representations, Look for a Pattern, Quickwrite, Note Taking Suppose your neighbor, Margaret Anderson, has just won the
More informationtroduction to Algebra
Chapter Six Percent Percents, Decimals, and Fractions Understanding Percent The word percent comes from the Latin phrase per centum,, which means per 100. Percent means per one hundred. The % symbol is
More informationA~ P(l + j* ACTIVITY 5.7 Time Is Money
ACTIVITY 5.7 TIME IS MONEY 589 ACTIVITY 5.7 Time Is Money OBJECTIVES 1. Distinguish between simple and compound interest. 2. Apply the compound interest formula to determine the future value of a lump-sum
More informationMath 084 W2010 Worksheet 3.1 v01b Interest Exercises Dressler. Name
Math 084 W2010 Worksheet 3.1 v01b Interest Exercises Dressler Name Solve. 1) Kevin invested part of his $10,000 bonus in a certificate of deposit that paid 6% annual interest, and the remainder in a mutual
More information5.1 Simple and Compound Interest
5.1 Simple and Compound Interest Simple Interest Principal Rate Time Ex 1) Simple Interest Future Value Ex 2) Maturity Values Find the maturity value for each loan at simple interest. a. A loan of $2500
More informationCompound interest is interest calculated not only on the original principal, but also on any interest that has already been earned.
Section 10.2: Compound Interest Hmk: 1-26 (will not ask) 27-89 (will ask). For example: 29, 31, 33, 39, 41, 45, 47, 51 (multi-step), 55, 59, 61, 69, 71, 65, 89. If setting up is hard just set up! If calculating
More informationHKUST. MATH1003 Calculus and Linear Algebra. Directions:
HKUST MATH1003 Calculus and Linear Algebra Midterm Exam (Version A) 8th October 2016 Name: Student ID: 10:30-12:00 Lecture Section: Directions: Do NOT open the exam until instructed to do so. Please turn
More informationHonors Pre-Calculus 3.5 D1 Worksheet Name Exponential Growth and Decay
Honors Pre-Calculus 3.5 D1 Worksheet Name Exponential Growth and Decay Exponential Growth: Exponential Decay: Compound Interest: Compound Interest Continuously: 1. The value in dollars of a car years from
More informationExamples of Strategies
Examples of Strategies Grade Essential Mathematics (40S) S Begin adding from the left When you do additions using paper and pencil, you usually start from the right and work toward the left. To do additions
More informationAlex has a greater rate of return on his portfolio than Jamie does.
The term (in years) is 9 years. The GIC is worth $6299.36. CSB: The principal is $2000. The annual interest rate is 3.1%. times per The term (in years) is 4 years. The CSB is worth $2261.88. Savings account:
More informationESSENTIAL QUESTION How do you calculate the cost of repaying a loan?
? LESSON 16.1 Repaying Loans ESSENTIAL QUESTION How do you calculate the cost of repaying a loan? Personal financial literacy 8.12.A Solve real-world problems comparing how interest rate and loan length
More informationMath 160 Professor Busken Chapter 5 Worksheets
Math 160 Professor Busken Chapter 5 Worksheets Name: 1. Find the expected value. Suppose you play a Pick 4 Lotto where you pay 50 to select a sequence of four digits, such as 2118. If you select the same
More information3.2 Anticipated Earnings: Investments and Savings MDM
3.2 Anticipated Earnings: Investments and Savings MDM WARM UP W1) You have a rich uncle who will double the money in your bank account each time you earn an A on a math test. If you earn an A on 12 math
More informationSimple Interest: Interest earned on the original investment amount only. I = Prt
c Kathryn Bollinger, June 28, 2011 1 Chapter 5 - Finance 5.1 - Compound Interest Simple Interest: Interest earned on the original investment amount only If P dollars (called the principal or present value)
More informationFinance Unit Math 114 Radford University
Finance Unit Math 114 Radford University Section 6.1 Percents ntroduction to Basic Percents The word percent translates to mean out of one hundred. A score of 85% on test means that you scored 85 points
More informationUsing Series to Analyze Financial Situations: Future Value
Using Series to Analyze Financial Situations: Future Value 2.7 In section 2.5, you represented the future value of an ordinary simple annuity by finding the new balance after each payment and then adding
More informationCHAPTER 4 Nominal and Effective Interest Rates
CHAPTER 4 Nominal and Effective Interest Rates 4-1 4.1 Nominal and Effective Interest Rate Statements q q The time standard for interest computations One Year Interest can be computed more frequently than
More information7.5 exponential growth and decay 2016 ink.notebook. February 13, Page 69. Page Exponential Growth and Decay. Standards.
7.5 exponential growth and decay 2016 ink.notebook Page 69 Page 70 7.5 Exponential Growth and Decay Lesson Objectives Standards Lesson Notes Page 71 7.5 Exponential Growth and Decay Press the tabs to view
More informationPART I: NO CALCULATOR (200 points)
Prealgebra Practice Final Math 0 OER (Ch. -) PART I: NO CALCULATOR (00 points) (.). Find all divisors of the following numbers. a) b) 7 c) (.). Find the prime factorization of the following numbers. a)
More informationInterest Compounded Annually. Table 3.27 Interest Computed Annually
33 CHAPTER 3 Exponential, Logistic, and Logarithmic Functions 3.6 Mathematics of Finance What you ll learn about Interest Compounded Annually Interest Compounded k Times per Year Interest Compounded Continuously
More information3.1 Simple Interest. Definition: I = Prt I = interest earned P = principal ( amount invested) r = interest rate (as a decimal) t = time
3.1 Simple Interest Definition: I = Prt I = interest earned P = principal ( amount invested) r = interest rate (as a decimal) t = time An example: Find the interest on a boat loan of $5,000 at 16% for
More informationChapter 5 Finance. i 1 + and total compound interest CI = A P n
Mat 2 College Mathematics Nov, 08 Chapter 5 Finance The formulas we are using: Simple Interest: Total simple interest on principal P is I = Pr t and Amount A = P + Pr t = P( + rt) Compound Interest: Amount
More informationRESPs and Other Ways to Save
for Indigenous Peoples Workbook 4 RESPs and Other Ways to Save Copyright 2017 ABC Life Literacy Canada First published in 2016 by ABC Life Literacy Canada All rights reserved. ABC Life Literacy Canada
More informationCase Study Analysis PERSONAL FINANCE DECATHLON State Competition, April 6
Case Study Analysis 1. Your team is charged with providing financial recommendations to a fictional family based on their current and future financial capability and needs. 2. You are provided with incomplete
More informationMathematics of Finance
CHAPTER 55 Mathematics of Finance PAMELA P. DRAKE, PhD, CFA J. Gray Ferguson Professor of Finance and Department Head of Finance and Business Law, James Madison University FRANK J. FABOZZI, PhD, CFA, CPA
More informationExample. Chapter F Finance Section F.1 Simple Interest and Discount
Math 166 (c)2011 Epstein Chapter F Page 1 Chapter F Finance Section F.1 Simple Interest and Discount Math 166 (c)2011 Epstein Chapter F Page 2 How much should be place in an account that pays simple interest
More informationChapter 9, Mathematics of Finance from Applied Finite Mathematics by Rupinder Sekhon was developed by OpenStax College, licensed by Rice University,
Chapter 9, Mathematics of Finance from Applied Finite Mathematics by Rupinder Sekhon was developed by OpenStax College, licensed by Rice University, and is available on the Connexions website. It is used
More informationLesson Description. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards)
Lesson Description Students learn how to compare various small loans including easy access loans. Through the use of an online calculator, students determine the total repayment as well as the total interest
More information3.6. Mathematics of Finance. Copyright 2011 Pearson, Inc.
3.6 Mathematics of Finance Copyright 2011 Pearson, Inc. What you ll learn about Interest Compounded Annually Interest Compounded k Times per Year Interest Compounded Continuously Annual Percentage Yield
More informationID: ID: ID: ID: 1.3.1b. ID: 1.3.2a
1. An arithmetic sequence is a list of numbers in which consecutive numbers share a common difference. Each number after the first is calculated by adding the common difference to the preceding number.
More informationBob Brown, CCBC Essex Math 163 College Algebra, Chapter 4 Section 2 1 Exponential Functions
Bob Brown, CCBC Esse Math 163 College Algebra, Chapter 4 Section 2 1 Eponential Functions Motivating Eample Suppose that, on his 18 th birthday, Biff deposits $10,000 into an account that earns 6% annual
More informationName Date. Key Math Concepts
3-1 Guided Exercises Checking Accous Key Math Concepts Total deposit = sum of deposits cash recieved To update the running balance of a check register, add deposits and subtract debits. a + b = b a; a
More informationSection 4.2 (Future Value of Annuities)
Math 34: Fall 2016 Section 4.2 (Future Value of Annuities) At the end of each year Bethany deposits $2, 000 into an investment account that earns 5% interest compounded annually. How much is in her account
More information