1. April 8, 2010Math 132: Foundations of Mathematics 8.1 Homework Solutions 453: 47, 49, 50, 66 47.Taxes paid = $1008; Total Cost = $17,008 49.Discount = $103.20; Sale Price = $756.80 50.Discount = $6.60; Sale Price = $9.90 66. 30% decrease

2. Aprili 8, 2010Math 132: Foundations of Mathematics Amy Lewis Math Specialist IU1 Center for STEM Education

3. April 8, 2010Math 132: Foundations of Mathematics 8.1 Simple Interest Calculate simple interest. Use the future value formula. Use the simple interest formula to calculate loans.

4. April 8, 2010Math 132: Foundations of Mathematics Banking How is interest on loans and bank accounts calculated? How often is interest paid or accumulated?

5. April 8, 2010Math 132: Foundations of Mathematics Simple Interest Interest calculated only on the principal. –The principal is the amount of money that we deposit or borrow. Simple Interest = principal x rate x time I = Prt The rate is expressed as a decimal when calculating simple interest.

6. April 8, 2010Math 132: Foundations of Mathematics Calculations You deposit $3000 in a savings account, which has a rate of 5%. Find the interest at the end of the first year. A student took out a simple interest loan for $2400 for two years at a rate of 7%. What is the interest on the loan?

7. April 8, 2010Math 132: Foundations of Mathematics Future Value for Simple Interest Future value is the inclusion of the accumulated interest and the principal for the final value of the account/loan at the end of the term. The future value, A, of P dollars at simple interest rate r for t years is given by A = P(1 + rt)

8. April 8, 2010Math 132: Foundations of Mathematics Future Value How does the formula for Future Value relate to the formula for Simple Interest? A loan of $2040 has been made at 7.5% for four months. Find the loan’s future value.

9. April 8, 2010Math 132: Foundations of Mathematics Compound Interest Interest computed on the original payment as well as on any accumulated interest. A = P(1 + r)t A = future value P = Principal or present value r = rate t = time in years

10. April 8, 2010Math 132: Foundations of Mathematics Compound Interest You deposit $1000 in a savings account at a bank that has a rate of 4%. –Find the amount of money in the account after 5 years subject to compound interest. –Find the amount of interest. –How does this compare to the simple interest that would have been calculated?

11. April 8, 2010Math 132: Foundations of Mathematics Homework 459: 35 465: 1 & 2 Look over your test and make corrections. Next Session: Friday, April 9