Definitions
What can be defined as the "amount of money initially deposited or borrowed?"
Principal
P=$450 R= 7% Time=2 years
Calculate the Interest
$63.00
I=P*R*T
Simple Interest
P=$100 r=5% t=3 years n= 4
How much is in the bank account?
$116.075 = $116.08
A bank is offering 3.5% simple interest on a savings account. If you deposit $7,500, how much interest will you earn in two years?
$525
The amount a lender charges a borrower is a percentage of the principal — the amount loaned.
Interest Rate
p=$5,400 R=3.5% T= 6 months
Calculate Interest Rate
94.50
A= P(1+ r/n)nt
Compound Interest
P= $2000 r=8%, Compounded weekly for 5 years
How much is in the bank account after 5 yrs. and what is the return on investment (ROI)?
A= $2982.73
ROI = $982.73
$400 interest is earned on a principal of $2,000 at a simple interest rate of 5% interest per year. For how many years was the principal invested?
I = PRT
T= I / PR
T= $400/ (2000 x .05)
T= 4 years
What can be defined as A method to calculate the amount of interest charged on a sum at a given rate for a given period.
Simple Interest
How many years will it take for $1,200 to yield an interest of $180 at 3% simple interest?
5 years
What is n in the compound interest equation if we are calculating for 6 months?
n= 1/2 or .5
A person deposits $100 in the bank at an annual interest rate of 5%.
What is the balance at the end of one year?
$105
Jim invested $4,000 in a bond at a yearly rate of 4.5%. He earned $540 in interest. How long was the money invested?
3 years
What can be defined as the "The interest calculated on the principal and the interest accumulated over the previous period? "
compound interest
A person deposits $365 in a bank at 7% for 3 years. How much money will be in the account after 3 years?
$441.65
What will our equation look like if we were compounded yearly for 6 years at 3% ?
A=P(1+.03/1)(6)(1)
A person deposits $633 at a yearly rate of 10%. What is the deposit amount after 2 years?
A= $633 ( 1 + .1/1) 1x2=
$765.93
If you deposited $5000 in a bank account with an 8% simple interest, how much will you have in total after 6 years?
I = PRT
I = $5000 x .08 x 6
I = $2400
Total = $5000 + $2400= $7400
What is the difference between compounded quarterly and compounded semiannually?
semiannually is 6 months so 1/2 of a year
quarterly is every 3 months so it's one 1/4 of a year
A person deposits $3,576 in a bank at 3% interest for 6 years. How much money is in the account after 6 years?
$4,219.68
What is the balance on a bank account if our deposit was $5000 at an annual interest rate of 10% which compounded monthly for 2 years?
A=5000 (1+ (.10/12)(2)(12)
A= $6101.95
A person has a credit card balance of $500 at a yearly rate of 28% compounded quarterly.
What is the balance after 2 years?
A= $500 (1+ .28/ 4) 4x2
A= $859.09
If you deposit $1000 into the bank account that has a 3% simple interest yearly, What will be in the account after 6 months?
I = $1000 x .03 x .5 = $150
Total = $1000 + $150 = $1150