1. Business Mathematics 5 types of transactions / questions
Simple Interest – flat rate of interest
Compound Interest – invest a single amount and see what it will grow to – PV Present value grows to FV Future Value
Compound Interest – the reciprocal of (2) above – someone promises to give you a single amount at a future date FV – what is it’s value today – PV – present value
Compound Interest – Deposit a regular amount – annuity and see what it will grow to FV
Compound Interest – Receive a single amount today (Loan) what future income payments will be the equivalent of this loan amount OR Invest a single amount today what future income stream (annuity) should I expect to receive from this investment

2. Business Mathematics

4. Your textbook uses the following formula but I think it is best to just apply general problem solving techniques.
If we can work out one year’s interest we can solve most simple interest questions

7. Answer

15. Interest =
Answer = $10, =

19. Effective rate = 2 x N x I / (N+1)