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Warm-up: 5/1/14

Warm-up: 5/1/14.

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Warm-up: 5/1/14

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  1. Warm-up: 5/1/14 Jess wants to buy a car but she cannot decide if she should buy a Honda or a Kia. The Honda costs $16,000 and depreciates at an annual rate of 8%. The Kia costs $12,000 and depreciates at an annual rate of 12%. What will each car be worth in 5 years? In 10 years? Which car should she buy and why? 2. Ariana has a choice of two investments. She can invest $10,000 at 5% for 6 years or she can invest $9,000 at 6.5% for 7 years. Both accounts are compounded annually. Which investment will result in a greater amount of interest earned?

  2. Objective: To model exponential growth and decay using The compound interest and ‘e’ as a base. Standards: 5/1/14 Simple interest formula: Example: warm-up Problem #1 A = ending balance P = Principal (or initial investment) r = interest rate (in decimal form) t = time (years)

  3. Compound interest: Compound Continuous:

  4. What is ‘e’? Is Euler’s Number Make an x-y table and Input the following values Using a calculator. What do you Observe? 1 10 100 1000 1000000

  5. Ray put $2,000 into a savings account. The interest on the account is 12% per year compounded quarterly. He wants to put the money away for 7 years. Using the compound interest method, how much will Ray have at the end of that time period? In four years, Ben wants to have $5000 available to make a down payment on a new car. If the bank offers 4.25% interest compounded daily, how much should Ben invest in a savings account now so that he has the money for his car? An amount of $2,340.00 is deposited in a bank paying an annual interest rate of 3.1%, compounded continuously. Find the balance after 3 years. Examples:

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