Eight years ago, Mrs. Madonna inherited 120 000 bucks. She invested this money in a bank for 8 years at 9% compounded annually. She used this investment to set up her take away shop.
Use the following formula to calculate the amount of money she had accumulated at the end of 8 years...
A= P(1+ i )n (just imagine the "n" a little higher up....Like to the power of n)
Please solve this for me, I'm dead without it! My maths teacher goes through work too bloody fast for anyone to really walk away with a firm grasp on anything she talked about.
Use the following formula to calculate the amount of money she had accumulated at the end of 8 years...
A= P(1+ i )n (just imagine the "n" a little higher up....Like to the power of n)
Please solve this for me, I'm dead without it! My maths teacher goes through work too bloody fast for anyone to really walk away with a firm grasp on anything she talked about.
-
A is the accumulated total
P is the initial investment
i is the interest expressed as a decimal (9% = 0.09)
n is the number of years
So:
A = 120,000 * 1.09^8
(^ means to the power)
A = 239,107.52
If you try to learn things like this by remembering formulas you will never do it because the formula is too abstract. The way to do problems like this is to think about them. I don't know the formula for compound interest off by heart but I can calculate compound interest because I understand what it IS.
Simplify and use examples...
Lets say you have £100. In the first year it makes 9% interest which means it gets multiplied by 1.09.
£100 * 1.09 = £109.
In the second year your £109 again makes 9% interest, so the formula now is
£100 * 1.09 * 1.09 = £118.81
1.09 * 1.09 is 1.09 to the power 2, so right away you can see where the "power of n" term comes from in the formula.
Your teacher should be teaching you what the formula means, not just expecting you to remember it.
P is the initial investment
i is the interest expressed as a decimal (9% = 0.09)
n is the number of years
So:
A = 120,000 * 1.09^8
(^ means to the power)
A = 239,107.52
If you try to learn things like this by remembering formulas you will never do it because the formula is too abstract. The way to do problems like this is to think about them. I don't know the formula for compound interest off by heart but I can calculate compound interest because I understand what it IS.
Simplify and use examples...
Lets say you have £100. In the first year it makes 9% interest which means it gets multiplied by 1.09.
£100 * 1.09 = £109.
In the second year your £109 again makes 9% interest, so the formula now is
£100 * 1.09 * 1.09 = £118.81
1.09 * 1.09 is 1.09 to the power 2, so right away you can see where the "power of n" term comes from in the formula.
Your teacher should be teaching you what the formula means, not just expecting you to remember it.
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A= P(1+ i )^n
A = To find!!
P = 120000 ( The amount invested)
i = 9/100 ( The rate percent interest)
n = 8 ( Number of years for the investment).
A = 120000(1 + 9/100) ^8
Do the bit INSIDE the brackets first
1+ 9/100 = 1.09
Raise
1.09 to the power of 8 = 1.09^8 = 1.9925626416901921 = 1.9926 ( 4dp)
Multiply 120000 by 1.9926
120000x 1.9925626416901921 = 239107.517002823052 = $239107.52
A = $239107.52
A = To find!!
P = 120000 ( The amount invested)
i = 9/100 ( The rate percent interest)
n = 8 ( Number of years for the investment).
A = 120000(1 + 9/100) ^8
Do the bit INSIDE the brackets first
1+ 9/100 = 1.09
Raise
1.09 to the power of 8 = 1.09^8 = 1.9925626416901921 = 1.9926 ( 4dp)
Multiply 120000 by 1.9926
120000x 1.9925626416901921 = 239107.517002823052 = $239107.52
A = $239107.52
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P is the principal, which is the money invested.
i is the interest rate per year, as a decimal, so 9%=0.09
n is the number of years
A is the amount that the investment accumulates to the n years.
So here, A=$120 000(1.09)^8 which you should be able to find using the x^y
button on your calculator. (I make it a little under $240 000)
i is the interest rate per year, as a decimal, so 9%=0.09
n is the number of years
A is the amount that the investment accumulates to the n years.
So here, A=$120 000(1.09)^8 which you should be able to find using the x^y
button on your calculator. (I make it a little under $240 000)
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A = 120,000 x (1 + 0.09)^8
=> A = 120,000 x (1.09)^8
i.e. A = 120,000 x 1.992562642
so, A = $239,107.52.....to the nearest cent.
Simon, don't hesitate to ask your teacher to repeat a process.....she might not be aware that she is going too fast. If nobody speaks up....she will assume all is o.k.
Good luck.
:)>
=> A = 120,000 x (1.09)^8
i.e. A = 120,000 x 1.992562642
so, A = $239,107.52.....to the nearest cent.
Simon, don't hesitate to ask your teacher to repeat a process.....she might not be aware that she is going too fast. If nobody speaks up....she will assume all is o.k.
Good luck.
:)>