Amount of
Simple Interest
:
A
=
P
(1
+
rt
)
where P = Principal ( Present Value)
A = Amount ( Future Value)
r = annual rate of interest (in decimal form)
t = borrowing time in years
___________________________________
Amount with
Interest Compounded
Periodically
:
A
=
P
1
+
r
n
"
#
$
%
’
nt
where P = Principal ( Present Value)
A = Amount ( Future Value)
r = annual rate of interest (in decimal form)
n = number of compounds per year
t = borrowing time in years
_______________________________________
Amount with
Interest
Compounded Continuously
:
A
=
Pe
rt
where P = Principal ( Present Value)
A = Amount ( Future Value)
r = annual rate of interest (in decimal form)
t = borrowing time in years
This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentExamples worked in lecture class:
1. Cal charged $1500 on his VISA card to pay tuition his first
semester at FSU. (He thought it would be much easier to pay the
bill after graduation.) If interest is charged at 1.5% per month
compounded daily, how much will Cal owe in five years?
2. Fran just inherited $50,000 from a rich uncle. How much of
This is the end of the preview.
Sign up
to
access the rest of the document.
 Fall '11
 Kutter
 Algebra, Time Value Of Money, Future Value, Annual rate, decimal form

Click to edit the document details