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## Compound Interest

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**Warm Up 6 (2.7.2014)**• Simplify: a) b) 2. Write an explicit model for the table.**HW 5.8 Check**• Arithmetic, 12, Difference=6, 8 weeks • Geometric, 500, Ratio=2, 2048000 • A) 4, 16, 64, 256, 1024 B) r=4 C) Next = Now*4 D)**Compound Interest**• When compounded Annually: y = a (1 + r )t**COMPOUND INTEREST FORMULA when not compounded annually**annual interest rate(as a decimal) Starting amount time(in years) amount at the end number of times per year that interest in compounded**Works for compounded annually as well**n= 1 when compounded annually**(12•**3) .06 900 12 EX 1: Find the amount that results from $900 invested at 6% compounded monthly after a period of 3 years. MAKE sure you the EXPONENT in ( )!!! (when you put in the calculator!) CHANGE THIS PROBLEM ON YOUR PAPER!!!!!!**4**(2) .08 500 4 EX 2: Find the amount that results from $500 invested at 8% compounded quarterly after a period of 2 years. MAKE sure you SIMPLIFY the EXPONENT FIRST!!!! (before you put in the calculator!)**Example 3:**Suppose you invest $32,000 into an account that has an annual interest rate of 5.2% compounded quarterly for 3 years. Find the total amount after 3 years.**Complete The practice problems in pairs! But each student**should work out every problem!**Warm-Up 6**• A pair of jeans cost $25.99, and the sales tax is 7%. Use the formula C = p + rp to find total cost of the jeans, where C is the total cost, p is the price, and r is the sales tax rate. 2. Evaluate: 3xy – 10x where x = -3 and y = 5 3.Write and solve an equation to model the word problem: You borrow $60 to buy a bread making machine. You charge customers $1.50 a loaf for your special bread. If you want to make a profit of $100, how many loaves of bread must you sell? Write a function rule to describe your profit as a function of the number n of loaves sold.