Formulas
What is I=Prt?
Simple interest
What is a emergency fund?
Savings reserved for unexpected costs or financial emergencies.
You invest $1,000 at a simple interest rate of 5% per year for 2 years. How much interest will you earn?
Answer: $100
You invest $1,000 at a 5% annual interest rate compounded yearly for 2 years. How much interest will you earn?
Answer: $102.50
If josh invests $9540 dollars into green bank with a rate of 8% as simple interest for 8 years and then decides to transfer all the money from green bank to Red bank that has a rate of 5% compound interest for another 8 years, How much money does Josh have now assuming no more deposits and investments were made?
Josh will have around a total of $23,110 in 16 years.
What is P(r+10)2?
Compound interest
What is a credit score?
A numeric measure of creditworthiness based on credit history.
If a simple interest of $120 is earned in 3 years at an annual interest rate of 8%, what was the principal amount?
Answer: $500
If a total of $1,120 is accumulated in 3 years at an annual interest rate of 8% compounded yearly, what was the principal?
Answer: Around $890
If Josh has to pay 31 thousand for the first year at Harvard that is 3 years away. He gets 5 thousand in Scholar ships, 4000 from his family, Gets 3000 from financial aid. If he works and gets 400 a month but saves 200 each month. But if he does not reach his goal on time, he will have to take a student loan with a rate of 2.4% interest. How many months would it take for him to pay off the interest if he needs to take a loan?
It will take 2 months to pay of the interest from the needed loan.
What is the formula for monthly payment?
Monthly Payment ≈ (Loan Amount ÷ Number of Months) + Monthly Interest
Ex: 11,800 ÷ 60 + 23.60/month
What is the difference between a Debate card and a Credit card?
Debit card: Allows purchases from funds in your checking account
Credit card: Revolving credit used for purchases, subject to repayment and interest
A sum of money was invested at simple interest and earned $450 over 5 years. If the principal was $1,500, what was the annual interest rate?
Answer: 6% per year
A sum of money was invested and grew to $1,950 in 5 years. If the principal was $1,500, what was the annual interest rate compounded yearly?
Answer: 5.36% per year
Josh wants to get a credit card. Either Bank Red which gives 5.6% simple interest from savings and Green Bank which gives 2.6 percent Compound interest. How long would it take for Green Bank Interest to gains to pass Red Bank if he deposited 3000 in Bank Red and 2000 in Bank Green?
It would take around 65–70 years.
What are Liabilities?
Debts owed to others.
A simple interest of $360 was earned on a principal of $1,200 at 6% per year. How long did the money remain invested?
Answer: 5 years
How long will it take for a principal of $1,200 to grow to $1,500 at 6% annual interest compounded yearly?
Answer: Around 3.83 years
Sophia invests €2,000 in a savings account that offers an annual interest rate of 6%, compounded quarterly. Meanwhile, the annual inflation rate is 3%. Calculate the real value of her investment after 8 years, adjusted for inflation. Round your answer to the nearest euro. Show all calculations and explain the reasoning behind each step.
Around €3,209
What is the formula for Unit price?
Answer: Unit Price = Total Cost ÷ Quantity
What is the difference between a Checking account and a Savings account?
Checking account: A deposit account for daily transactions
Savings account: A deposit account that earns interest over time
Sarah borrows $2,500 from a bank at simple interest. She owes a total of $3,000 after a certain period. If the bank charges 10% per year, how many years did Sarah borrow the money?
Answer: 2 years
Sarah borrows $2,500, and after compounding annually at 10% for some time, she owes a total of $3,000. How many years did she borrow the money?
Answer: Around 1.91 years
Alex has €5,000 in credit card debt at an annual interest rate of 18%, compounded monthly. He also has the option to take a personal loan of €5,000 at 12% annual interest, compounded monthly, to pay off the credit card debt. The personal loan comes with an origination fee of 2% applied upfront and a 3-year term.
At least €2,000