Summerwkst.lesson28

# Summerwkst.lesson28 - Summer Session, Worksheet Lesson 28...

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Summer Session, Worksheet Lesson 28 Formulas that may be used (found on the course formula sheet): For the following formulas : S is future value, P is present value, r is the annual interest rate, k is the number of compounding periods in a year, t is time in years, A is the amount of money, and R is the amount of payment; with the formula for the periodic interest rate r i k = . 5. Future Value of an Investment with continuously compounded interest: rt S Pe = (The amount at the end of an investment when an amount P is allowed to grow with interest compounded continuously.) 6. Future Value of an Investment: (1 ) kt S P i = + (The amount at the end of an investment when an amount P is allowed to grow.) 7. Present Value of an Investment: (1 ) kt P S i - = + (The amount that must be invested now to provide for a future value.) 8. Effective Rate of Interest : (1 ) 1 k E i = + - (The effective rate for an account.) 9. Future Value of an Annuity: (1 ) 1 kt i S R i + - = (The amount at the end for an ordinary annuity with regular payments.) 1) George can invest in an account paying an annual interest rate of 12 ½ %

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Summerwkst.lesson28 - Summer Session, Worksheet Lesson 28...

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