Quote of the Day:
"St. Augustine had good insight on the division of
labor between God and his children when he wrote that
we should work as if everything depended on our
efforts and pray as if everything depended on the
Almighty."
Objectives:
The student will apply the definition of e to compound interest.
The student will compute the number of years for an
investment to double.
The student will compute the amount of an investment given
the principal, rate and length of the investment.
1. Go over homework and collect it.
2. Discuss Compound Interest.
Let R = Interest Rate per period
Let P = Principal.
Let n = number of periods
3. Examples:
4. To Compute Effective Annual Yield
Use one of the compound interest formulas.
Find the amount of an investment of $1 for 1 year
and then subtract the dollar.
Examples: Compute the E.A.Y. for the following:
4% compounded continuously: E.A.Y. = .040810
4 1/8% compounded quarterly: E.A.Y. = .04189
4 1/4% compounded semiannually: E.A.Y. = .04295
5. Worksheet on Rule of 72
6. Quiz on Logs
7. Assignment:
Worksheet on Rule of 72
Review Sheets for Mini Examination #2
Worksheet on compound interest problems
Click here to go to the next page