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MAT-1010 Lecture Notes - Lecture 3: Annual Percentage Rate, Interest, Compound Interest

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fuchsiawhale233
20 Sep 2016
School
App State
Department
Mathematics
Course
MAT-1010
Professor
Jacob Winebarger

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Document Summary

I=interest, r =apr (annual percentage rate), t=time (yrs), p=principal, a=annuity (total value) Investment- you invest the principal amount p at apr r and earn interest i. Loans- you borrow principal p at certain rate r and have to pay interest i. ,000 at 9% apr for 5 years, with simple interest. A= p+i p=,000 i= ,400 a= 5,400 +12,000= ,400. Chris will pay ,400 back to the bank. After 23 years, earning 7. 5% apr simple interest, he has earned ,000 interest. I=interest, a=annuity, p= principal, n= number of periods each year, t=time in years, r=rate. Yearly=1, quarterly= 4, monthly=12, weekly=52, daily= 365. Chris wants to buy a car for ,000. The loan is for 5 years, 9% apr compounded monthly. Chris will pay ,788. 17 for this car.

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Related Questions


7. (a) Assume R dollars are deposited into an ordinary annuity at the end of each month where interest is 9% APR compounded monthly. Calculate the least whole number of years that it will take the future value of the annuity to grow to 1,000R dollars. 5 points) (b) Suppose now that R dollars are deposited into another ordinary annuity at the end of each month for 15 years at an interest rate of z% APR compounded monthly. At the end of the 15 years it is known that the value of the annuity is 500R. State the function f(x) that you would apply Newton's method to in order to approximate the value of a. (4 points) (c) What is the maximum amount of compound interest (expressed as a percentage, rounded to one decimal) that can be earned on a principal of P dollars for exactly 2,000 days at 7.4% APR? (use 1 year = 365 days) [4 points)