Math 1320 Week 6 Day 1 Notes 9/29/15
Math 1320 Week 6 Day 1 Notes 9/29/15 Math 1320
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This 5 page Class Notes was uploaded by Carolina Rodriguez on Tuesday September 29, 2015. The Class Notes belongs to Math 1320 at University of Texas at El Paso taught by Professor Jeremy Ramirez in Fall 2015. Since its upload, it has received 46 views.
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Date Created: 09/29/15
Math 1320 Week 6 Day 1 Notes 92915 Chapter 2 Section 21 Simple Interest INTPVrt PVpresent valueprinciple this is the money you put in R interest rate convert percent into a decimal always by moving the decimal place two places to the left If asked for percentage move decimal place two places to the right t time in years always convert time into years Formulas for finding t in years if given in Months Month givenmonths in a year Days Days given days in a year Weeks Weeks given weeks in a year Hour Hours given hours in a year Future Value FVPV1rt FV future value the rest stands for the same as simple interest If PV is not given the formula is PVFV1rt If r is not given the formula is rFVPVPVt If t is not given the formula is tFVPVPVr Examples 1 Find FV PV5000 R8 convert to decimal 08 T6 months by dividing 6 12 12 year FV5000108l2 FV5000104 FV5000104 FV5200 Make sure to use the parenthesis in the right places and insert them in you calculator to get the correct answer 2 Find PV PVFVlrt Fv1000 R45 T6 years PV1000l6045 PV1000l 27 PV78740 Round to the second decimal place since we are dealing With money 3 Find r t 5 years PV 1000 Simple interest 250 FV1250 To find FV in this question add the simple interest plus PV RFVPVPVt R1250100010005 R2505000 R055 4 Find t PV4000 R8 FV4640 T FVPVPVr T 46404000 400008 T460320 T2 years Compound Interest FVPV 1rm quotmt PVpresent value r Interest rate Ttime in years FV future value m Number of compounding periods per year also known as reinvesting How to determine the value of m Compound annually m1 also known as yearly Compound month1y m12 every 12 times a year Compound quarterly m4 every 4 months a year Compound semiannua11y m 2 every 6 months a year Compound weekly m52 every week of the year Compound dai1y m365 every day a year get use to this formula it is easier FVPV 1iquotn Irm is the compounding rate per yer Nmt is the total compounding periods EX Find FV PVlOOO R 06 T 4 years M 4 Irm I064015 Nmt44 16 FVPV 1 i quotn FV10001015 quot16 FV126899 2 Find PV PVFV1i quotn FV1000 R 42 M52 T 5 I42052 N552260 PV1000104252 A260 PV8 1065 Effective Interest Rate Reff effective interest rate Reff1rnomm Am 1 Rnom nominal rate or What your interest rate is Ex r 15 m1 rnom 15 reff115quot11 reff 1151 reff15 or 15