Melody

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Melody  11 feb 2022
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ok random,
The first 2 were well done.
I'll try to show you what compound interest and nets of bananas have in common.

Bananas
2 bananas per net
12/2 = 6 nets per dozen

$4.08 per dozen
r = $4.08 / 6 per net

We want 5 dozen bananas
n = 5 * 6 = 30 nets (that is 5 dozen and 6 nets per dozen)

Compound Interest
2 months per 'net' In this case a net is the compounding period of time. There are 2 months in each 'net'.
Interest is stated per year, there is 12 months in a year, so you can think of a year as a dozen months
12/2 = 6 'nets or compounding periods' per year

Interest rate is 0.072 per year (12 months)
r = 0.072 / 6 per 'net' or compounding period. (the interest rate for 2 months has got to be less than the interest rate per year! )
r = 0.012 (This is the interest rate per 2 months (per net)

we want 8 years worth of interest.
There are 6 compounding periods (nets) every year. so there must be 8 * 6 = 48 compounding periods (nets) in 8 years
n = 8 * 6 = 48

THINK ABOUT IT HARD FOR A WHILE THEN HOPEFULLY YOU WILL UNDERSTAND
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Now study this question, then when you think that you have it try thiis one without looking back.
Look back and double check that it is right before you post your answers.

Tony invested some money at 4.2% per year. It is compounded every 2 months (each 'net' holds 2 months) for 4 years.
a) Write 4.2% as a decimal
b) How many 'nets' of 2 months are there in a year . Use this number to get the next 2 answers.
c) r is the interest rate per compounding period (per net) Find r (show working)
d) n is the total number of compounding periods (nets) . Find n (show working) and put n=

Give it your best Random - don't cut corners - and think really hard.
Good luck.
3 ene 2014