12-1 Compound Interest. 12-2 Compound Interest and Present Value.
Series 1 5.9 Compound Interest (1/4) Compound Interest grows as a Geometric Series AAnnuity A =...
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Transcript of Series 1 5.9 Compound Interest (1/4) Compound Interest grows as a Geometric Series AAnnuity A =...
1
Series
Series
5.9 Compound Interest (1/4)
Compound Interest grows as a Geometric Series
n
100r1PA
AA = Value of AnnuityAnnuityCompound Interest
Ending Money
PP = PrincipalPrincipalStarting Money
rr = Interest RateInterest Rateper Time Period
nn = Number of Number of Time PeriodsTime Periods
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Series
Series
5.9 Compound Interest (2/4)$10 000 is invested for 3 years at 8%
A = P(1 + )r100
A = 10 000(1 + )38100
= 10 000 x 1.083
= $12 597.12
I = $12 597.12 – 10 000
I = $2 597.12
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Series
Series
5.9 Compound Interest (3/4)
Fry remembers he had a bank account back in the twentieth century. Surprisingly his old bankaccount is still active, and has been accruing interest for the past thousand years, bringing the balance from 93 cents to $4.3 billion
Was the interest rate really 2¼%?
Futurama Episode – April 27Futurama Episode – April 27thth 1999 1999A Fishful of Dollars (S1/E6)A Fishful of Dollars (S1/E6)
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Series
Series
5.9 Compound Interest (4/4)
n
100r1PA
Futurama Episode – April 27Futurama Episode – April 27thth 1999 1999A Fishful of Dollars (S1/E6)A Fishful of Dollars (S1/E6)
A = $4 300 000 000P = $ 0.93
n = 1 000 years
0000003004100r193.0
1000
9146556234100r1
1000
100010001000
9136556234100r1
929503022.1100r1
.a.p%25.20225.0r
Video ClipVideo Clip