1. Put post-writes in the box. Which would you choose? Why?
Warm Up
Put post-writes in the box.
A rich man (not a teacher!) offers you a choice of prizes to reward your hard work in Math I. You can either have:
$1000/day for a month (30 days)
1 cent on the first day that will double each day for 30 days
Which would you choose? Why?

2. Homework Check

3. Today’s Lesson: Compound Interest
February 27, 2014

4. What is Compound Interest?
What do you know about the word compound?
Think about it…..where have you heard of the word interest before?
What can you conclude about Compound Interest?

5. Compound Interest
Maybe this video will help clear things up. Let’s Watch…………….
When a bank pays interest on both the principal and the interest an account has already earned, the bank is paying compound interest.
Compound interest is an example of exponential growth

6. Compound Interest Formulas
In this lesson we are going to talk about three different ways interest can be compounded and there is a formula that can be used for each way.
The three ways are………..
Compounded for any length of time(General Formula)
Compounded Annually (Every Year)
Compounded Continuously (If Time permits)

7. General Compound Interest Formula
You can use the following formula to find the balance of an account that earns compound interest.
𝐴=𝑃 ( 1+ 𝒓 𝒏 ) 𝒏𝒕
Annual: n = 1
Semiannual: n = 2
Quarterly: n =4
Monthly: n = 12
Daily: n = 365
Hourly: n = 8760

8. Compound Interest Problem

9. More Practice

10. More Practice

11. Compounded Annually Earlier we saw that Annually mean one year.
If you take the original formula ,𝐴=𝑃 ( 1+ 𝒓 𝒏 ) 𝒏𝒕 , and plug in 1 for n you will get a new formula that works for Compounding Annually.
That formulas is………….. 𝐴=𝑃 (1+𝑟) 𝑡

12. Compounded Annually Problems

13. More Practice

14. Who Wants A Challenge

15. Compounded Continuously

16. Compounding Continuously Problems

17. More Practice

18. More Practice

19. Homework: Compound Interest Worksheet