Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

Compound Interest (or, "When will I ever use exponential functions in real life?)

Compound interest is an example of a real-world exponential function
...
For example, you would use it to calculate how much money
you would have in the bank after interest is applied
...
One, continuous compound, is
when interest is steadily and constantly applied
...
This is when interest is calculated every month, every six months, or any other specific set
time period
...
They are:

* P stands for principle
...
71 in all cases

* R is the interest rate
...
In other
words, if the word problem says that an account has 5% interest, you would use
...

* T is time in years
...
If you're given 6 months, t is not 6
...
5, because it is half of one year

* N is the number of times per year interest is applied
...


* A is the answer

The equations are:

Compound continuous: A=Pe^(rt)

Non-continuous: A=P(1+r/n)^(nt)

To solve, simply plug in all variables that you know, and use simple algebra to solve for any that you do
not
...
Both are simple, but one requires a little more work
...
The second type is solved the same way, except you do this twice for two sets of
numbers a d compare the results as stated in the question

---