Compound Interest
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
?
.05
?
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
.05
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
?
.06
?

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

.06

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
?
.04
?

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

.04
12

 

12
*

2

The End

"Poundcake" is a compound word

 

        "Compound" is not

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