1. Copyright ©2015 Pearson Education, Inc. All right reserved. Chapter 5  Mathematics of Finance

2. Copyright ©2015 Pearson Education, Inc. All right reserved. Section 5.1  Simple Interest and Discount

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4. Slide 1 - 4 To furnish her new apartment, Maggie Chan borrowed $4000 at 3% interest from her parents for 9 months. How much interest will she pay? Solution: Copyright ©2015 Pearson Education, Inc. All right reserved. Example:

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8. Slide 1 - 8 Suppose that $5000 is invested at an annual interest rate of 3.1% compounded continuously for 4 years. Find the compound amount. Solution: Copyright ©2015 Pearson Education, Inc. All right reserved. Example:

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11. Section 5.2  Annuities, Future Value,  and Sinking Funds

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14. Slide 1 - 14 A business sets up a sinking fund so that it will be able to pay off bonds it has issued when they mature. If it deposits $12,000 at the end of each quarter in an account that earns 5.2% interest, compounded quarterly, how much will be in the sinking fund after 10 years? Solution: Copyright ©2015 Pearson Education, Inc. All right reserved. Example:

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16. Section 5.3  Annuities, Present Value,  and Amortization

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19. Slide 1 - 19 Jim Riles was in an auto accident. He sued the person at fault and was awarded a structured settlement in which an insurance company will pay him $600 at the end of each month for the next seven years. How much money should the insurance company invest now at 4.7%, compounded monthly, to guarantee that all the payments can be made? Solution: Copyright ©2015 Pearson Education, Inc. All right reserved. Example:

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22. Slide 1 - 22 Copyright ©2015 Pearson Education, Inc. All right reserved.

23. Slide 1 - 23 Copyright ©2015 Pearson Education, Inc. All right reserved.