1. Interest Applications - To solve problems involving interest.

2. Compound Interest This will find the amount of an account after so many years after depositing money into a bank. P – Principal (deposited amount) A – amount after calculated r – interest rate n – number of times compounded per year t – amount of years

3. n Annually – n = 1 Semiannually - n = 2 Quarterly - n = 4 Monthly - n = 12

4. Example You deposit $1,000 in an account that pays 8% interest. Find the balance after 1 year when compounded by the following: a)Annuallyb) quarterlyc) monthly

5. Continuously Compounded Interest Application of the number “e” A – Amount after calculated P- Amount start with (Principal) r – interest rate t – time (in years)

6. Example You deposit $1,250 in an account that pays 7% annual interest compounded continuously. What is the balance after 2 years?

7. HOMEWORK WS