Actuarial Science 2053 Lecture Notes - Lecture 2: Interest, Leap Year, Iphone 3Gs

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= a dollar amount of money representing a fee or service charge paid to the lender for the use of his/her money r = rate of interest per year. = ratio of the interest earned over a period of time to the principal t = length of investment (in years) S = accumulated value of p = original principle + interest. 2. combining the above two formulas, you get: S = p + i = p + prt = p(1+rt) Exact interest: a. b. c. ordinary interest: a. b. c. B. the value of t must be given in years note about time if time is gien as something other than years, we make the following adjustments to t: 1. t= # of months/12 if time s given in months, then. A. if time isgiven in days or if you are given actual dates.

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