Professional Documents
Culture Documents
(A) Definitions
Simple interest means that only the principal invested earns interest Principal means the original amount invested or borrowed Rate refers to the interest rate being paid as a percent usually per year (per annum) The amount of the investment refers to the total of the principal and the interest being paid
2
investment which is the sum of the original principal and the interest earned upon combining A = P(1 + rt)
3
(C) Examples
I=? P=$2500 I=? P=$1200 I=? P=$3000 I=? P=$2000 I=? P=? I=? P=? r=3.75%/a r=4.25%/a r=3%/a r=? r=4%/a r=4.25%/a t=3 a t=6 m t=? t=1 a t=2 a t=175 d A=? A=? A=$3120 A=$2210 A=$4050 A=$1200
(D) Summary Part 1 (i) => if you list the investment amount yearly, you get the sequence (1000?), 1050, 1100, 1150, 1200,...1500 which we can write as tn = a + (n - 1)d or tn = 1050 + (n - 1)50 or tn = 50n + 1000
(E) Homework