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MAT_1143-apr_4 - April 4 2011 Click to edit Master subtitle...

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Click to edit Master subtitle style April 4, 2011 Section 6.2
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Exam 3 Exam 3 will be Wednesday April 20 It will cover 4.7, 5.1-5.6, 6.1-6.5 I will be getting a review sheet ready for you There will be extra credit work that can be done on Angel to review Will not have class April 13 and 15 (I am speaking in Indianapolis at a National Conference) Planning a review session on Tuesday, April 19 from ?? Can come and ask questions about material on the exam Would be good if you’ve done the review quiz first
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Compound Interest-looked at in 5.6 Compounded Annually A=P*(1 + rate)t, where t in years Most banks now compound more often than once a year Compounded n times a year, we get a slightly modified formula A=P*(1 + rate/n)n*t, where t in years
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Examples Suppose we invest $1000 At 6% compounded annually for 2 years A: A = 1000*(1 + .06/2)^1 B: A = 1000*(1 + .06/1)^2 C: A = 1000*(1 + .06/2)^2 D: A = 1000*(1 + .06/1)^1 We MUST watch how we enter things into the calculator to do the computations
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Examples Suppose we invest $1000 At 5.75% compounded monthly for 2 years A: A = 1000*(1 + .0575/2)^2 B: A = 1000*(1 + .0575/12)^(12*2) C: A = 1000*(1 + .0575/12)^2 D: A = 1000*(1 + .0575/12)^12
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Examples Suppose we invest $1000 At 5.7% compounded daily for 2 years A: A = 1000*(1 + .057/365)^1 B: A = 1000*(1 + .057/1)^365 C: A = 1000*(1 + .057/365)^(365*2) D: A = 1000*(1 + .057/365)^365
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