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14111cwir10ws.3

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Section 5.1 Simple Interest: A = P (1 + rt ) where A is the accumulated amount, P is the principal amount, r is the annual interest rate as a decimal, and t is time in years. Compound Interest: A = P 1 + r m mt where A , P , r , and t represent the same as above and m is the number of compounding periods per year. Continuous Compound Interest: A = Pe rt where A , P , r , and t represent the same as above and e 2 . 718281828 ... . TVM Solver: N =the total number of compounding periods I % = interest rate (as a percentage) PV = present value (principal amount). Entered as a negative number if invested, a positive number if borrowed. PMT = payment amount (0 if no payments are involved) FV =future value (accummulated amount) P/Y = C/Y =the number of compounding periods per year. Move the cursor to the value you are solving for and hit ALPHA and then ENTER. In all of the problems we do make sure that
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Unformatted text preview: END is highlighted at the bottom of the screen. This represents that payments are received at the end of each period. • The Eﬀective Rate of Interest gives the equivalent interest rate if compounding was only done once a year. Use option C:Eﬀ( on the ﬁnance menu. Enter as Eﬀ( interest rate as a percentage , number of compounding periods per year ) 6. How much would you have to deposit in an account earning an annual 4 . 5% simple interest rate if you wanted to have \$1000 after 6 years? 7. At what simple interest rate will an investment triple in 20 years? 8. How much would you have in 8 years if you invest \$1,500 into an account earning 5 . 4% per year compounded quarterly?...
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