geno3141

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 #1
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The compound interest formula:  A  =  P(1 + r/n)^(n·t)

A  =  final amount         P  =  beginning amount         r  =  rate (as a decimal)

n  =  number of times compounded per year             t  =  number of years

1)  4 019 013  =  1 491 420(1 + r/1)^(1·11)   --->   4 019 013  =  1 491 420(1 + r)^(11)

   --->  (divide by 1 491 420)   --->   2.694 756(1 + r)^11

   --->   (take the 11th root)   --->   1.0943  =  1 + r     --->   r  =  0.094304365

2) If $73,376.39 was the interest earned on lending $101,000, this means that the final amount is $73,376.39 + $101,000  =  $174,376.39:

     174,376.39  =  101 000(1 + r/4)^(4·7)     --->     174,376.39  =  101 000(1 + r/4)^28

    --->  (divide by 101 000)   --->   1.726498911 =  (1 + r/4)^28

   --->   (take the 28th root)   --->   1.019694849  =  1 + r/4

   --->   0.019694849  =   r/4     --->   r  =  0.0787793946

3)  a)  Interest of $227,708.21 on a loan of $59,000 loan gives a final amount of $286,708.21.

   b)  286 708.21  =  59 000(1 + 0.074/2)^(2·n) 

--->   4.859461186  =  (1.037)^(2n)

--->  (find the log of both sides)   --->  log( 4.859461186 )  = log[ 1.037^(2n) ]

---> (exponents come out as multipliers)   --->   log( 4.859461186 )  = 2n · log[ 1.037 ]   

---> (divide by 2· log[ 1.037 ] )   --->   21.7567247 years

4) 2 =  1·(1 + r/4)^(4·7)     --->     2 = (1 + r/4)^28
      <finish like problem #1>
There's a lot of stuff here --- any questions?
16 nov 2014