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Compound Interest: A is the loan's future value (total value) Compound Interest: A is the loan's future value (total value) P is the Principal, the starting amount Compound Interest: A is the loan's future value (total value) P is the Principal, the starting amount r is the interest rate Compound Interest: A is the loan's future value (total value) P is the Principal, the starting amount r is the interest rate n is the number of compounding periods per year Compound Interest: A is the loan's future value (total value) P is the Principal, the starting amount r is the interest rate n is the number of compounding periods per year t is time in years Compound Interest: A ? P ? n ? r ? t ? is the loan's future value (total value) is the Principal, the starting amount is the interest rate is the number of compounding periods per year is the time in years P = $2,000 r = 10% compounding periods = 4 time = 3 years Find A, total in the account if: A = ( 1+ ) $2,000 ? 10% ? 4 ? 4 * 3 ? P = $2,000 r = 10% compounding periods = 4 time = 3 years Find A, total in the account if: A = ( 1+ ) Find A to the nearest penny $2,000 $1995.73 $2017 $2689.78 $2874.89 10% 4 4 * 3 P = $4,000 r = 5% compounding periods = 3 time = 2 years Find A, total in the account if: A = ( 1+ ) $4,000 ? 5% ? 3 ? 3 * 2 ? P = $4,000 r = 5% compounding periods = 3 time = 2 years Find A, total in the account if: A = ( 1+ ) Find A to the nearest penny: $4,000 $4,014.75 $4,417.04 $4,765.22 $4,998.65 5% 3 3 * 2 If SEMI-ANNUAL, it compounds times per year. If it is QUARTERLY, it compounds 4 times per year. If it is MONTHLY, it compounds times per year. If it is WEEKLY, it compounds times per year. n tells you HOW MANY times the interest is compounded in a year If SEMI-ANNUAL, it compounds times per year. If it is QUARTERLY, it compounds 4 times per year. If it is MONTHLY, it compounds times per year. If it is WEEKLY, it compounds times per year. n tells you HOW MANY times the interest is compounded in a year 52 12 2 Jacob saved $24 at the Bank. He got a 6% interest rate which compounds quarterly. What would his account be worth in 3 years? Da Bank A = ( 1+ ) $24 ? 6% ? 4 ? 4 * 3 ? Jacob saved $24 at the Bank. He got a 6% interest rate which compounds quarterly. What would his account be worth in 3 years? How Much $$$ ? A = ( 1+ ) $24 $24.60 $26.88 $28.34 $28.69 6% 4 4 * 3 Jacob saved $700 at the Bank. He got a 4% interest rate which compounds monthly. What would his account be worth in 2 years? Da Bank A = ( 1+ ) $700 ? 4% ? type n value * 2 ? Jacob saved $700 at the Bank. He got a 4% interest rate which compounds monthly. What would his account be worth in 2 years? Cash Cash Cash Cash A = ( 1+ ) $700 $722.14 $758.20 $806.17 $859.98 4% 12 12 * 2 The End "Poundcake" is a compound word
"Compound" is not |