The Mathematics of Money

102 Chapter 3 Compound Interest Beginning Interest End of Month Month Balance Earned Balance 1 $5,000.00 $33.33 $5,033.33 2 $5,0 ...

Copyright © 2008, The McGraw-Hill Companies, Inc. must be expressed in months, and so we must multiply it by 12 (since there are ...

104 Chapter 3 Compound Interest Assuming that this all works out all right with your calculator, you are likely to find that ent ...

Copyright © 2008, The McGraw-Hill Companies, Inc. illustrate this by finding a future value with a number of commonly used compo ...

106 Chapter 3 Compound Interest marketing gimmick) it is seldom considered seriously. For any practical purposes, there is seldo ...

Copyright © 2008, The McGraw-Hill Companies, Inc. FV
$5,000(2.71828)0.40 FV
$5,000(1.491824296) FV
$7,459.12 This is the s ...

108 Chapter 3 Compound Interest FORMULA 3.2.1 The Continuous Compound Interest Formula (Alternative Version) FV
PVe(rt) where ...

Copyright © 2008, The McGraw-Hill Companies, Inc. F V
PV(1  i)n F V
$4,265.97  1 + __0.036 360  1,307 F V
$4,861.58 If ...

FV
PV(1  i)n FV
$1,200  1  0.06_____ 12  9 FV
$1,200(1.04591058) FV
$1,255.09 Since the question asked for the amoun ...

Copyright © 2008, The McGraw-Hill Companies, Inc. For each of the following problems, fi nd the appropriate values of i and n t ...

C. Comparing Compounding Frequencies Complete the following table comparing the future value of $1,600 at 9% interest in 20 yea ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Heather bought a new dining room set from a furniture store that was offering ...

G. Additional Exercises In all of the problems we have looked at so far, we have assumed that the interest rate remains constan ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Here is another easy choice: Example 3.3.2 Which of these two banks is offerin ...

116 Chapter 3 Compound Interest Example 3.3.3 Leo has a life insurance policy with Trustworthy Mutual Life of Nebraska. The comp ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Then, dividing both sides by 100 we get: 1.0406
1  R And then subtracting 1 ...

118 Chapter 3 Compound Interest Writing off the exponent of 1 and dividing both sides by $100 we get: (^)  1  __rc (^)  c
( ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Effective Rates and The Truth in Lending Act Under most circumstances, financi ...

120 Chapter 3 Compound Interest Using Effective Rates Though interest may be actually credited to an account by using the nomina ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Or, if we enter the expression all at once: Operation Result 20000*1.0625^(100 ...