Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach.

Slides:

Advertisements

Similar presentations

4/29/2015Section 8.31 Section 8.3 Compound Interest Objectives 1.Use the compound interest formulas. 2.Calculate present value. 3.Understand and compute.

Advertisements

6.7 Compound Interest.

The Solution of a Difference Equation for a Compound Interest Account.

What is Compound Interest? Compound interest is interest that is compounded at certain intervals or earned continuously (all the time). Annually: A = P(1.

What is Interest? Interest is the amount earned on an investment or an account. Annually: A = P(1 + r) t P = principal amount (the initial amount you borrow.

EXAMPLE 5 Model continuously compounded interest A = Pe rt SOLUTION Finance You deposit $4000 in an account that pays 6% annual interest compounded continuously.

Lesson 3-3 Example Step 1Write the compound interest formula. Find the value of an investment of $2,000 for 4 years at 7% interest compounded semiannually.

Section 5.7 Compound Interest. A credit union pays interest of 4% per annum compounded quarterly on a certain savings plan. If $2000 is deposited.

7-8 simple and compound interest

Exponents and Properties Recall the definition of a r where r is a rational number: if then for appropriate values of m and n, For example,

EXAMPLE 2 Finding a Base Marc received 273, or 35%, of the votes in the student council election. How many students voted in the election? Student Council.

Interest MATH 102 Contemporary Math S. Rook. Overview Section 9.2 in the textbook: – Simple interest – Compound interest.

Notes Over 7 – 8 1. Suppose you deposit $1000 in a savings account that earns 6% per year. Find the interest earned in two years. Simple Interest Formula.

Simple and Compound Interest

 Rewriting literal equations  Rewrite and use common formulas.

6-7 Change each percent to a decimal. 1.4% 2.9%3.2.0% 4.6.5% % % COURSE 2 LESSON 9-7 (For help, go to Lessons 6-2.) Simple and Compound Interest.

Useful Savings Facts & Formulae The amount invested is called the principal When a principal £ P earns compound interest at an annual rate R for n years,

Aim: How do we solve exponential equations using common or natural logarithms? Do Now: 1. Solve for x: 3 x = Solve for x: 4 x = 8 3. Solve for x:

Lesson 7.6 Concept: How to find simple interest Guidelines: When you compute simple interest for a time that is less than 1year, write the time as a fraction.

B1: I can calculate simple interest on a bank account.

Notes Over 7 – 7 Solve for the indicated variable.

© 2010 Pearson Prentice Hall. All rights reserved. CHAPTER 8 Consumer Mathematics and Financial Management.

– The Number e and the Function e x Objectives: You should be able to… 1. Use compound interest formulas to solve real-life problems.

 1. Do inverse operation  A. 1 st undo addition or subtraction  B. 2 nd undo multiplication or division.

7-7 Simple and Compound Interest. Definitions Left side Principal Interest Interest rate Simple interest Right side When you first deposit money Money.

Introduction Logarithms can be used to solve exponential equations that have a variable as an exponent. In compound interest problems that use the formula,

8 – 5 Properties of Logarithms Day 2

20.3 Compound Interest. The more common form of interest used is Compound Interest. It is called compound because the interest accumulates each year is.

3.1 (part 2) Compound Interest & e Functions I.. Compound Interest: A = P ( 1 + r / n ) nt A = Account balance after time has passed. P = Principal: $

PRE-ALGEBRA. Lesson 7-7 Warm-Up PRE-ALGEBRA Simple and Compound Interest (7-7) principal: the amount of money that is invested (put in to earn more)

Exponential Function If a > 0 and a ≠ 1, then defines the exponential function with base a. 4.2.

Simple and Compound Interest Video: Simple/ Compound InterestSimple/ Compound Interest Video: A Penny a DayA Penny a Day.

You deposit $950 into an account that earns 4 % interest compounded annually. Find the balance in the account after five years. In your last calculation,

Pre-Algebra Simple and Compound Interest Suppose you deposit $1,000 in a savings account that earns 6% in interest per year. Lesson 7-8 a. Find the interest.

Section 6.7 Financial Models. OBJECTIVE 1 A credit union pays interest of 4% per annum compounded quarterly on a certain savings plan. If $2000 is.

Compound Interest Formula. Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been.

 Wage is classified at level 3 ($35,001-$80,000)  70, ,001 = $34,999  34,999 x 0.30 (30c for each dollar over $35,001) = $10,  10,499.7.

Exponential Growth and Decay. Exponential Growth When you have exponential growth, the numbers are getting large very quickly. The “b” in your exponential.

How do we solve exponential and logarithmic equations and equalities?

The Substitution Method Objectives: To solve a system of equations by substituting for a variable.

5-5 Simple Interest. Video Tutor Help Finding simple interestFinding simple interest (5-5) Simple Interest Khan Academy Simple interest.

Textbook pages 69 & 73 IAN pages 91 & 95. Each side of the equation must be balanced. We balance an equation by doing the same thing to both sides of.

Interest Applications - To solve problems involving interest.

Exercise Write 5% as a decimal Write 6.5% as a decimal Exercise.

Week 13 Simple Interest. Lesson Objectives After you have completed this lesson, you will be able to: Represent or solve simple interest problems. Solve.

Simple Interest.

Simplify the expression.

3. 3 Solving Equations Using Addition or Subtraction 3

3-5 More on Solving Equations

CHAPTER 8 Personal Finance.

Students will be able to:

Section 4.7 Compound Interest.

Exponential Growth and Decay

Applications of Exponential Functions

Students will solve two step equations (12-4).

Solving Two-Step Equations

3-8 PRESENT VALUE OF INVESTMENTS

Algebraic Equations Solving One Step Equations with Whole Numbers

Simple and Compound Interest

Exponential Growth and Decay

Solving Percent Problem with Equations

CHAPTER 8 Personal Finance.

Solving Multiplication Equations

Solving Equations with Variables on Both Sides

Solving Equations with Variables on Both Sides

Compounded and Continuous Interest

More Applications of Percents

Grade 6 Patterning and Algebra Unit

§8.3, Compound Interest.

Presentation transcript:

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? Start by writing down the compound interest formula. Next

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Now list the variables that make up the formula on the left. Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Read through the problem and translate the information into the listed variables. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Continue to read through the problem and translate the information into the variables. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Substitute the variable values into the formula. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal The equation must be solved for P. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Multiplication is the operation that is understood to be between the P and the. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Move this to the other side by performing division (the opposite operation to multiplication). How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Enter the calculations into your calculator. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Round to the nearest cent. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

Compound Interest - Solving for the Principal Therefore, $ would have to be deposited into the account now in order to have $1000 in 5 years. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? Back