Week 8 - Simple and Compound Interest - Class Makeup Video
This week, we will begin a new unit on Financial Math. Please make sure you print out the notes and bring them with you to class. We will start this week with a discussion of interest - simple interest and compound interest. There will be a lot of formulas in this unit, and you will need to practice with them to get comfortable using them. I will provide you with the formulas (unlabeled) for the exam, so you need to focus on identifying what formulas apply to what problems. In addition, it will be very important to remember your calculator for class every day in this unit - you don't want to have to do these calculations by hand!Those of you in MAT099 should have been reviewing logarithms and exponentials in that class recently. We will be using logarithms to help solve problems in this unit; if you need additional review of logarithms, please see me. The webpage below is also a good source of review for problems involving logs and exponents.
We will be starting with simple and compound interest on Monday. Unfortunately, due to a nasty stomach bug that's been taking down my family one-by-one this weekend, I need to cancel class on Monday. To make up for this, I have recorded a video lecture over simple and compound interest. Please watch the video below and then complete the worksheet linked below. I will be collecting the worksheet in class on Wednesday, March 22.
Challenge Problem (Due Monday, March 27): A PayDay loan company charges $25 in (simple) interest for every $100 borrowed for a 14 day loan. The total borrowed, plus interest must be paid back at the end of 14 days. Suppose you want to borrow $400 to pay for your Spring Break trip. How much will you be required to pay back at the end of 14 days? What is the interest rate on this loan?
P is the principal (the amount you start with), r is the rate (in decimal form) and t is the time (in years). The slide at the 45 second mark in the video gives the formula for simple interest and describes the variables. The slide at the 9:34 mark does the same for the compound interest formula.
On questions such as the challenge question when the rate is set up in a series of days but it is a simple interest (yearly) does my interest accrue yearly still?
I am really looking forward to learning about Financial math. I feel I can use this in the future to better understand interest and to help accomplish goals with saving money for larger purchases. I love playing with numbers in formulas so I think this unit it going to be a lot of fun. I just need to remember that when we are talking about T in the formulas it refers to years and I need to turn months into a fraction if need be.
I'm gonna have to use one of these formulas soon. My car broke down and couldn't afford the payment out of pocket. I have to make a $4,000 payment and will be forced to take out a loan. I don't know what my interest rate will be yet. Wish me luck
Will we be getting our tests back on Wednesday?
ReplyDeleteYes
DeleteThis comment has been removed by the author.
ReplyDeleteAre the print out worksheets for this chapter on web work yet -Taylor Gilbert
ReplyDeleteThey are now. Let me know if you don't see them.
DeleteI can't see the worksheet any where on this page
ReplyDeleteClick on the words "Worksheet - due in class. . ." right below the video.
ReplyDeleteWhat is the difference between P, r, and t? I'm having trouble figuring out.
ReplyDelete-Adarius Wells
P is the principal (the amount you start with), r is the rate (in decimal form) and t is the time (in years). The slide at the 45 second mark in the video gives the formula for simple interest and describes the variables. The slide at the 9:34 mark does the same for the compound interest formula.
DeleteIs there a way to know when we should use logs in the compound and simple interest equations?
ReplyDeleteYou should only use the log if you are trying to solve for a variable in the exponent.
DeleteOn questions such as the challenge question when the rate is set up in a series of days but it is a simple interest (yearly) does my interest accrue yearly still?
ReplyDeletenvm...got it.
ReplyDeleteI thought the simple interest problems was simple. I'm have problems with coming out with the right answer
ReplyDeleteMake sure you're using the right variables. A lot of times, the time is given in months - make sure you convert to years.
DeleteI am really looking forward to learning about Financial math. I feel I can use this in the future to better understand interest and to help accomplish goals with saving money for larger purchases. I love playing with numbers in formulas so I think this unit it going to be a lot of fun. I just need to remember that when we are talking about T in the formulas it refers to years and I need to turn months into a fraction if need be.
ReplyDeleteI've decided to double my car payments
ReplyDelete-Zane Bembrick
:). Did you calculate how much you'll save by doing that?
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteI'm gonna have to use one of these formulas soon. My car broke down and couldn't afford the payment out of pocket. I have to make a $4,000 payment and will be forced to take out a loan. I don't know what my interest rate will be yet. Wish me luck
ReplyDelete