Tonight's Homework

Greetings Everyone,

As promised here are the questions/problems for tonight's homework. Please remember that you must try to do this. Come to class tomorrow with these problems completed as best you can.

OK, here we go. The compound interest formula is as follows:


Amount=Principle(1+r/n)yn

Amount = How much in your account
Principle = What you started with (originally)
r = annual interest rate
n = compounding frequency
y = number of years

And:

Money can compound at different time periods


Amount=Principle (1+r/n)yn

This changes the value of n:
Annually: n=1
Semiannually (every 6 months): n=2
Quarterly (every 3 months): n=4
Monthly: n=12

Different Compounding

Basic Formula: Amount=Principle(1+r/n)yn
Various Versions:
Yearly: Amount = Principle (1+r)y

Quarterly: Amount=Principle (1+r/4)4y

Monthly: Amount=Principle (1+r/12)12y

Now we have the information that we went over in today's class. See how far you can get with these three problems.

1. Principle = $100
rate = 10%
n = quarterly
y = 2

What is the amount?

2. Principle = $1,000
rate = 5%
n = semiannually
y = 3

What is the amount?

3. Principle = $10,000
rate = 2%
n = monthly
y = 1

You should at least be able to set these up and many of you should be able to complete them. Do your best!! And remember to bring your independent reading book with you to class every day.