1. 1 Section 3.1 Percentage Growth and Interest

2. 2 EXAMPLE Suppose $1000 was invested on Feb 1, 2000 in a savings account that pays 10% annual interest. DateAmountChange Feb 1, 2000$1000.00 Feb 1, 2001$1100.00$100.00 Feb 1, 2002$1210.00$110.00 Feb 1, 2003$1331.00$121.00 Feb 1, 2004$1464.10$133.10 Feb 1, 2005$1610.51$146.41 Feb 1, 2006$1771.56$161.05

3. 3 PERCENTAGES The word percentage means “one hundredth.” So, 1 percent of something is 1/100 of it. The symbol % is the abbreviation for the word percent. The symbol % simply stands for the number 1/100.

4. 4 ENGLISH WORDS AND THEIR MATHEMATICAL EQUIVALENTS WordSymbol percent% of (“times”)× and (“plus”)+ is (“equals”)=

5. 5 PERCENTAGE INCREASE AND DECREASE To increase A by p% means to increase A by adding p% of A to itself. To decrease A by p% means to decrease A by subtracting p% of A from A.

6. 6 INTEREST AND CONSTANT PERCENTAGE GROWTH If the annual interest rate is p%, this means that at the end of each year, p% of the amount at the beginning of the year is added to the account as interest. In other words, the amount in the account at the beginning of the year is increased by p% at the end of the year.

7. 7 INTEREST AFTER n YEARS The amount in the account after interest is added at the end of the n th year is NOTE: A 0 is the amount of the initial deposit.