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Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach.

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Presentation on theme: "Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach."— Presentation transcript:

1 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? Start by writing down the compound interest formula. Next

2 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

3 Compound Interest - Solving for the Principal Now list the variables that make up the formula on the left. Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

4 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

5 Compound Interest - Solving for the Principal Read through the problem and translate the information into the listed variables. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

6 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

7 Compound Interest - Solving for the Principal Continue to read through the problem and translate the information into the variables. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

8 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

9 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

10 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

11 Compound Interest - Solving for the Principal Substitute the variable values into the formula. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

12 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

13 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

14 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

15 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

16 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

17 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

18 Compound Interest - Solving for the Principal The equation must be solved for P. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

19 Compound Interest - Solving for the Principal Multiplication is the operation that is understood to be between the P and the. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

20 Compound Interest - Solving for the Principal Move this to the other side by performing division (the opposite operation to multiplication). How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

21 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

22 Compound Interest - Solving for the Principal Enter the calculations into your calculator. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

23 Compound Interest - Solving for the Principal How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

24 Compound Interest - Solving for the Principal Round to the nearest cent. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? NextBack

25 Compound Interest - Solving for the Principal Therefore, $680.58 would have to be deposited into the account now in order to have $1000 in 5 years. How much would have to be deposited now into an account that earns 8% per annum compounded annually to reach $1000 in 5 years? Back

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