Problem

Solving:
Compound
Interests
Focus 8 Learning Goal – (HS.N-RN.A.1 & 2, HS.A-SSE.B.3, HS.A-CED.A.2, HS.F-IF.B.4, HS.F-
IF.C.8 & 9, and HS.F-LE.A.1) = Students will construct, compare and interpret

linear and exponential function models and solve problems in

context with each model.
4 3 2 1 0
In addition to level 3, Students will construct, compare, and Students will Students will Even with help, the
students make interpret linear and exponential construct, compare, have partial student is not
connections to other function models and solve problems in and interpret linear success at a 2 successful at the
content areas and/or context with each model. function models and or 3, with help. learning goal.
contextual situations - Compare properties of 2 functions solve problems in
outside of math. in different ways (algebraically, context with the
  graphically, numerically in tables,
verbal descriptions)
model.
- Describe a situation
- Describe whether a contextual where one quantity
situation has a linear pattern of changes at a constant
change or an exponential pattern of rate per unit interval as
change. Write an equation to model compared to another.
it.
- Prove that linear functions change  
at the same rate over time.
- Prove that exponential functions
change by equal factors over time.
- Describe growth or decay
situations.
- Use properties of exponents to
simplify expressions.
Simple interest: I=prt

I = interest
p = principal: amount you start with
r = rate of interest
t= time in years
If you invest $3,000 at 5% for one year, how much
will you make for the year?

I = prt
= 3000  0.05  1
= 150
You made $150 for the year.
Compound interest formula:

A = p(1+r)t

A = balance p = principal
r = rate t = time in years
 Find the total amount in your account if you
start with $750 at 7.5% interest
compounded annually for 2.5 years.

A = p(1+r)t
= 750(1+0.075)2.5
= 750(1.075)2.5 (use a calculator here!)
= $898.63
How much should you invest at 7%
compounded annually to have $200
after 5 years?
A = p(1+r)t (Plug in what you know.)

200 = p(1.07)5 (get p alone, then use a calculator.)

200 = p
(1.07)5
142.60= p
If you put $100 in the bank at 4%
interest compounded annually
and leave it until you are 60, how
much money will you have?

A = p(1+r)t
= 100(1.04)46 (This assumes you are currently 14)

= 607.48
What about a mutual fund that
pays 10% interest compounded
annually?

A = p(1+r)t
= 100(1.10)46
= 8017.95