1. Isn’t it “Interest”-ing By: Reid Meeker

2. What is interest? fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets feeassets I have something that you want…you have to pay me for it

3. Simple Interest I = total interest accumulated based on principal given, rate of interest, and time of investment P = principal; amount of money invested r = rate; yearly interest rate for investments; must be written in decimal form (3% = 0.03) t = time; length of investment, in years, until you get your money back (6 months =.5 years) Example: deposit $1,000; interest rate 3%; for 3 years I = 1000(0.03)(3)= $90

4. Future Value Interest Formula A = Future Value; how much money you will have in total after investment time is completed P = principal; amount of money invested r = rate; yearly interest rate for investments; must be written in decimal form (3% = 0.03) t = time; length of investment, in years, until you get your money back (6 months =.5 years) Example: deposit $1,000; interest rate 3%; for 3 years ◦ A= $1,000[1+(0.03)(3)]= $1,090

5. Compound Interest Interest is calculated both on principal and accrued interest A = Future Value; how much money you will have in total after investment time is completed P = principal; amount of money invested r = rate; yearly interest rate for investments; must be written in decimal form (3% = 0.03) t = time; length of investment, in years, until you get your money back (6 months =.5 years) n = # of times per year interest in compounded ◦ Example: compounded every 3 months, n=4 (four times in 1 year)

6. Compound Continuously Compound

7. Continuously Coumpounded A = Future Value; how much money you will have in total after investment time is completed P = principal; amount of money invested r = rate; yearly interest rate for investments; must be written in decimal form (3% = 0.03) t = time; length of investment, in years, until you get your money back (6 months =.5 years) e = exponential function