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
Savings Account: How much simple interest would $8,500 earn in 5 years at an interest rate of 7.75%?
I = PRT = $8500 x 0.0775 x 5 = $318.75
Continuous Compound Interest: 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?
A = Pe^(rt) = $3,550e^(.039 x 10) = $5,243.28
Reconcile is when the 1.) _____ _______ matches the 2.) ______ _______ after revising with outstanding checks and outstanding deposits exactly.
1. Bank Statement
2. Check register.
Definition: When an account does not have enough money to cover a check that has been written. (Two words)
Insufficient Funds
Quarterly = ____
4x / year
Checking Accounts: Bank of America charges $5-per-check overdraft protection fee. Michelangelo had $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?
$1000 - $275 - $395 - $505 - $729.75 - $10 = $914.75 he owes the bank
Solve for Principal: You're going to invest in an account that pays an interest rate of 5.5% compounded annually. How much would you need to invest for the value of the account to reach $49,000 in 8 years?
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. (Three words)
Money Market Account
Daily = ____
365x / year
Compound Interest: 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%?
A = P(1+r/n)^(nt) = $8,500(1+.0455/4)^(4x5) = $10,657.69
Solve for Time: Jackson deposited $4,000 at 4.6% interest, compounded continuously, when he was 18 years old. How much will be in the account when he is 50 years old if he made no other deposits or withdrawals?
Total: $17,431.77
Need time 50 - 18 = 32 years = t
B = 4000e(.046 * 32)
Jack is comparing 3 types of accounts for investment purposes: simple interest, compounded monthly, & continuously compounded for the same rate of 3.4% over a period of 4 years and 6 months for an investment of $12,550.00. Which one has the most interest? how much more? Round to the nearest cent.
Continuously compounded, has the most. B=Pert - continuously, B = P (1 + r/n)nt compounded monthly n = 12, I = Prt, t= 4.5, P = 12,550.00 r = .034 = 3.4%
More than simple interest 2074.83 - 1920.15 = $154.68
More than compounded Monthly 2074.83 - 2071.66 = $3.17
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. (Three words)
Certificate of Deposit
Continuously = ____
e
Interest Earned: 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 along for 4 years?
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
Howie deposits $3,500 into an account that earns 5.1% interest compounded daily. What is the annual percentage yield
(APY) to the nearest hundredth of a percent?
APY = 5.23%
APY = (1 + .051/365)365 - 1
APY = 0.052319 * 100 = 5.23%
Ms. Curvier has which of the follow?
A) 3 daughters & a granddaughter
B) 3 sons & a granddaughter
C) 3 cats, 1 dog, & 7 cows.
D) I passion for bowling, teaching & her students.
Both A & D
3 sons - James, Anthony, & Alexander , granddaughter - Averly
Love to Bowl, Love teaching Math & Love all my students they are a part of my family.
Definition: The act of adding interest, or a deposit, to an account by the bank. (One word)
Crediting
Compounded bi-weekly = ____
26x / year
Present Value of a Single Deposit: How much money do you need to 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?
P = $738.34
Use P = A / [(1+r/n)^(nt)] and plug the values into the formula.
How long will it take $4,000 to increase to $7,000 at 8.5% simple interest? Round your answer to the nearest one-tenth of a year.
t = 8.8 years
I = prt; P= 4000, r = 8.5% >> .085 t = unknown
What is I? B - P = I; $7000 = B , $4000 = P,
7000- 4000 = I = 3000 / (4000 * .085) =8.8235...
How long will it take $21,000 to double at 12% simple interest? Round your answer to the nearest one-tenth of a year.
T= 8.3 years
I = 21,000 B =42,000 r= 12% >> 0.12vP = 21000. Find t.