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MATA32H3 (150)
Lecture

Just about everything Prof Grinnell wrote on the board.

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Department
Mathematics
Course
MATA32H3
Professor
Raymond Grinnell
Semester
Fall

Description
092210 Mathematics of Finance 5.1 Compound Interest Formula n a kt S = P(1 + r) = P(1 + )k P = principal r = periodic interest rate n = # of compounding periods S = compound amount a = APR (annual percentage rate) t = time (# of years) r = k n = t NB: Interest is always paid right @ the very end of each compounding period. Ex Invest \$10k @ 3.05% APR compounding monthly for 5 years. a) S = compounding amount a kt = P(1 + k = 10,000(1 + 0.030 ) (12)(5) 12 11,645.17 b) Period rate = r = a
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