Download
compound interest and other real world applications n.
Skip this Video
Loading SlideShow in 5 Seconds..
Compound Interest and Other Real World Applications PowerPoint Presentation
Download Presentation
Compound Interest and Other Real World Applications

Compound Interest and Other Real World Applications

272 Vues Download Presentation
Télécharger la présentation

Compound Interest and Other Real World Applications

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Compound Interest and Other Real World Applications

  2. What is Compound Interest? When you invest your money in a bank or investment fund, the bank uses the exponential growth to make you money. P: Principle (Amount deposited in the account) r: Rate (or interest rate, growth factor) n: number of times compounded per year t: time (in years) A: amount in the account after t years

  3. What Does “Number of Times Compounded” look like? Annually: Means n=1 Semiannually: n=2 Quarterly: n=4 Daily: n=?

  4. Ex 1: You deposit $1,500 in an account that pays 3.5% annual interest. Find the balance after 20 years if the account is compounded semiannually. P = $1,500 r = .035 t = 20 n = 2

  5. Exponential Decay Models There isn’t a big difference between Compound Interest and Exponential Decay Models… P: Initial Amount (the amount started with) r: percent decrease ( is the decay factor) n: number of times compounded per year t: time (in years) A: amount after t years

  6. Ex 2: A used Corvette was valued at $13,000 when it sold. It decreases in value by 15% each year. a. Write an exponential decay model for the value of the car. P = 13,000 r = .15 n = 1

  7. Ex 2: A used Corvette was valued at $13,000 when it sold. It decreases in value by 15% each year. b. Use the model to estimate the value after 5 years. t = 5

  8. Ex 2: A used Corvette was valued at $13,000 when it sold. It decreases in value by 15% each year. c. Use the model to estimate when the car will be worth $2,000. $5,768.17 A = 2,000 10 $2559.37 In about 11 years the car will be worth about $2,000 11 $2,175.46

  9. Ex 2: A used Corvette was valued at $13,000 when it sold. It decreases in value by 15% each year. d. Find the annual percent decrease and growth factor. Annual % decrease = 15% Growth Factor: .85

  10. Homework: pg.470#46-54pg. 478#46-52