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THE POWER OF INTEREST
DAVE RAMSEY'S INVESTMENT CALCULATOR
WHAT ARE SOME ITEMS YOU MAY LOAN TO A FRIEND?
The owner does not get to use the item for a period of time.
A saver is paid when they allow a borrower to use their money for a period of time. Interest is paid by a borrower and received by a lender or a saver.
“HE WHO HAS THE GOLD---RULES!”
“I do not believe Dave Ramsey’s claim.”
SIMPLE INTEREST Paid on the amount of the original investment and does not change over time. A1 Type the word Simple A2 Type in 100 A3 = A2 + 5 Drag
COMPOUND INTEREST Paid on the amount of the original investment and all accrued interest. C1 Type Compound C2 Type 100 C3 = C2 * 1.05
ADD $2,000 STARTING WITH A $100 INVESTMENT E1 Title Add $2,000 per year E2 Type 100 E3 = (E2 * 1.05)
RULE OF 72 HOW MANY YEARS TO DOUBLE YOUR MONEY? Divide 72 by the Interest Rate Interest rate is 4 72/4 = 18 years. Interest rate is 18 72/18 = 4 years
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Why borrow money? Individuals- to purchase large items such as homes and cars Businesses- to operate or expand their business (purchase a building,
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall. 7.6 Percent and Problem Solving: Interest.
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Earning Credit. Compelling Question Have you ever borrowed money from someone and not repaid it? Or has anyone ever borrowed money from you and not repaid.
Percents, Discounts and Interest PERCENTS: A percent is a representation of a number, compared to a total value of 100. A percent which is less than a.
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Copyright © 2007 Prentice-Hall. All rights reserved THE TIME VALUE OF MONEY PRESNET VALUE FUTURE VALUE.
The amount of money either being borrowed or saved A %, that will need to be converted into a decimal The amount of time in years Compound Interest A =P(1.
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SIMPLE AND COMPOUND INTEREST Since this section involves what can happen to your money, it should be of INTEREST to you!
7-8 SIMPLE AND COMPOUND INTEREST OBJECTIVE: 1. TO SOLVE SIMPLE INTEREST PROBLEMS 2. TO SOLVE COMPOUND INTEREST PROBLEMS Warm-Up Calculate 1)5% of 320 2)25%
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Compound Interest. A = New balance after interest P = Principle amount invested or borrowed. R = Interest Rate usually given as a percent (must changed.
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