Vocabulary
Definition: A percentage, or portion, of money that the bank pays you for having a savings account. Often viewed as a reward. (One word)
Interest
Annually = ____
1x / year
How much simple interest would $8,500 earn in 5 years at an interest rate of 7.75%? (*Interest only)
I = $3,293.75
I = PRT = $8500 x 0.0775 x 5 = $3,293.75
You invest $3,550 in an account with an interest rate of 3.9% compounded continuously. After 10 years, how much money will be in the account?
https://d138zd1ktt9iqe.cloudfront.net/media/seo_landing_files/continuous-compound-interest-formula-1613465712.png
A = $5,243.28
A = Pe^(rt) = $3,550e^(.039 x 10) = $5,243.28
What does it mean if you are second cousins with someone?
A) You two are siblings that share a grandparent
B) You two are siblings that share a great-grandparent
C) You two are Non-Siblings that share a grandparent
D) You two are Non-Siblings that share a great-grandparent
D) You two are Non-Siblings that share a great-grandparent
Definition: When an account does not have enough money to cover a check that has been written.
Insufficient Funds
Quarterly = ____
4x / year
Bank of America charges $5-per-check overdraft protection fee. Your uncle has $1,000 in his account. Over the next few days, he wrote checks (in order) totaling: $275.00, $395.00, $505.00, and $729.75. How much will he have to owe the bank, grand total?
Amount Owed = $914.75
$1000 - $275 - $395 - $505 - $729.75 - $10 = $914.75
You're going to invest in an account that pays an interest rate of 5.5% compounded annually. How much would you need to deposit initially for the value of the account to reach $49,000 in 8 years?
https://eor7ztmv4pb.exactdn.com/wp-content/uploads/2019/05/continuous-compound-interest-formula.png
P = $31,928.34
Must use A = P(1+r)^t and get 'P' by itself. Tackle the (1+r)^t first and then divide it to the other side to get 'P' by itself.
Which of these famous rap artist has a birthday on July 4th (Independence Day)?
A) Drake
B) Post Malone
C) Kanye West
D) Lil' Wayne
B) Post Malone
Definition: This specific type of account pays a higher interest rate than other types of accounts and often has limits on how many withdrawals you can do every month.
Money Market Account
Daily = ____
365x / year
How much money would you have at the end of 5 years if you deposited $8,500 in a bank account that compounded quarterly and had an interest rate of 4.55%?
https://eor7ztmv4pb.exactdn.com/wp-content/uploads/2019/05/continuous-compound-interest-formula.png
A = $10,657.69
A = P(1+r/n)^(nt) = $8,500(1+.0455/4)^(4x5) = $10,657.69
You invest $11,700 in an account paying an interest rate of 3.8% compounded semi-annually. Assuming no deposits or withdrawals are made, how long would it take for the account to reach $29,250? Round your answer to the nearest tenth of a year, i.e: 10.6 years.
https://eor7ztmv4pb.exactdn.com/wp-content/uploads/2019/05/continuous-compound-interest-formula.png
Time = 24.3 years
Use A=P(1+r/n)^(nt), then follow the 5 steps outlined in class (Ch. 2.6 worksheet in class) to get 't' by itself. You'll need to "Log it" to drop the exponents down and solve for 't'.
Name any one of the four faces that are carved on Mount Rushmore (You definitely know one for sure):
- George Washington -
- Abraham Lincoln -
- Thomas Jefferson -
- Teddy Roosevelt -
Definition: A certificate that states there's a specific sum of money on deposit and guarantees the payment of a fixed interest rate after a certain period of time.
Certificate of Deposit (CD)
Continuously = ____
e
Suppose a bank offered you a savings account with 7.25% interest. You decide to take advantage of the offer and deposit $4,000 into the account. The account is compounded monthly. How much interest would you earn if you left it alone for 4 years? *Interest only*
https://eor7ztmv4pb.exactdn.com/wp-content/uploads/2019/05/continuous-compound-interest-formula.png
Interest Earned = $1,341.05
You have to do A = P(1+r/n)^(nt), then take the difference of the new total amount and the original amount deposited. In other words, $5,341.05 - $4,000.00 = $1,341.05
You're committed to growing your savings account. You decide to deposit $500 over and over again every month for the next 5 years. If your savings account is compounded monthly at an interest rate of 3.4%, find the total amount of your savings account at the end of 5 years.
https://slideplayer.com/slide/3857042/13/images/36/Future+Value+Of+A+Periodic+Deposit.jpg
A = $32,650.58
Use the formula for Future Value of a Periodic Deposit to solve for 'A'
- University of Florida - Lamar State College Orange - Allegheny College - San Francisco State University.
You may not have heard of all of these schools, but they have one unique thing in common. What is it?
A) They've all had at least one of their student-athletes get drafted in the NBA
B) They all have orange and blue for their school colors
C) They've all had at least 1 million students graduate from their school
D) They all have the Gator as their mascot
D) They all have the Gator as their mascot
Definition: The act of depositing money into your bank account, usually by a business or the bank itself.
Crediting
Compounded seconds = ____
31,536,000x / year
How much money do you need to initially deposit in order to have $850 in your account, if you let your money grow at 4.75% interest compounded semi-annually for 3 years?
https://eor7ztmv4pb.exactdn.com/wp-content/uploads/2019/05/continuous-compound-interest-formula.png
P = $738.34
Use P = A / [(1+r/n)^(nt)] and plug the values into the formula.
How much money do you need to periodically deposit on a monthly basis in order to have $2,125 in your account, if you let your money grow at 6.25% interest compounded monthly for 5 years?
P = $30.26
Use P = (A x r/n) / [(1+r/n)^(nt) - 1] and plug the values into the formula.
There's a lot of interesting names floating around in College Football these days. Which TWO of the following players' names are 100% legitimate?
A) General Booty
B) Bird Cage
C) Blazen Wongs
D) Rowdy Shankapotamus
E) Major Burns
A) and E) - General Booty (Oklahoma University) and Major Burns (Louisiana State University)
Source: https://espnswfl.com/listicle/best-names-in-college-football/
The other legitimate names on this list are PIG Cage, BLAZEN Lono-Wong, and ROWDY Beers