16.2 Saving and Investing How can you save money by investing small amounts of money regularly?

Slides:

Advertisements

Similar presentations

Simple and Compound Interest

Advertisements

6.7 Compound Interest.

Sullivan PreCalculus Section 4.7 Compound Interest

Simple Interest Essential Skill: Explicitly Assess Information and Draw Conclusions.

What is Interest? Interest is the amount earned on an investment or an account. Annually: A = P(1 + r) t P = principal amount (the initial amount you borrow.

Section 5.7 Compound Interest. A credit union pays interest of 4% per annum compounded quarterly on a certain savings plan. If $2000 is deposited.

Chapter  Savings are money people put aside for future use. Generally people use their savings for major purchases, emergencies, and retirement.

7-8 simple and compound interest

Simple and Compound Interest

EXAMPLE 4 Solve a multi-step problem The owner of a 1953 Hudson Hornet convertible sold the car at an auction. The owner bought it in 1984 when its value.

Do Now 1)What does it mean to "invest"? 2) Why do you think it is best to start saving at a young age?

Do Now 4/23/10 Take out HW from last night. Take out HW from last night. Practice worksheet 7.6 odds Practice worksheet 7.6 odds Copy HW in your planner.

Managing your Personal Finances Unit 5 Banking Earning Simple vs

Notes Over 7 – 8 1. Suppose you deposit $1000 in a savings account that earns 6% per year. Find the interest earned in two years. Simple Interest Formula.

Simple Interest.

Simple and Compound Interest

Simple Interest Compound Interest. When we open a savings account, we are actually lending money to the bank or credit union. The bank or credit union.

Using Percents Part 2.

Simple & Compound Interest

SECTION 5-4 Simple Interest pp

Interest. How simple and compound interest are calculated Simple interest calculation I = PRT (Interest = Principal x Rate x Time) Dollar Amount x Interest.

Thinking Mathematically

6-7 Change each percent to a decimal. 1.4% 2.9%3.2.0% 4.6.5% % % COURSE 2 LESSON 9-7 (For help, go to Lessons 6-2.) Simple and Compound Interest.

SECTION 5-6 Compound Interest Tables pp

Notes Over 7 – 7 Solve for the indicated variable.

– The Number e and the Function e x Objectives: You should be able to… 1. Use compound interest formulas to solve real-life problems.

7-7 Simple and Compound Interest. Definitions Left side Principal Interest Interest rate Simple interest Right side When you first deposit money Money.

Certificates of Deposit pp SECTION.

Compound Interest Tables pp SECTION.

Section 5.7 Compound Interest.

Notes Over 3.5Interest Simple interest is found by multiplying the principal, the rate, and the time. Compound interest is the total amount earned each.

PRE-ALGEBRA. Lesson 7-7 Warm-Up PRE-ALGEBRA Simple and Compound Interest (7-7) principal: the amount of money that is invested (put in to earn more)

Simple Interest. Simple Interest – * the amount of money you must pay back for borrowing money from a bank or on a credit card or * the amount of money.

Simple Interest Formula I = PRT. I = interest earned (amount of money the bank pays you) P = Principle amount invested or borrowed. R = Interest Rate.

Math – Solving Problems Involving Interest 1.

Simple and Compound Interest Video: Simple/ Compound InterestSimple/ Compound Interest Video: A Penny a DayA Penny a Day.

You deposit $950 into an account that earns 4 % interest compounded annually. Find the balance in the account after five years. In your last calculation,

Big Idea Compound Interest is the way most banks and other savings institutions pay savers who put their money into their accounts. Repeated Multiplication.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall. Section 5.7 Financial Models.

Section 6.7 Financial Models. OBJECTIVE 1 A credit union pays interest of 4% per annum compounded quarterly on a certain savings plan. If $2000 is.

Section 5.7 Financial Models. A credit union pays interest of 4% per annum compounded quarterly on a certain savings plan. If $2000 is deposited.

6-3 (E)Simple Interest Formula I = PRT. I = interest earned (amount of money the bank pays you) P = Principle amount invested or borrowed. R = Interest.

Holt CA Course Simple Interest Warm Up Warm Up California Standards California Standards Lesson Presentation Lesson PresentationPreview.

6.6 Compound Interest. If a principal of P dollars is borrowed for a period of t years at a per annum interest rate r, expressed in decimals, the interest.

Simple and Compound Interest Simple Interest I = Prt Compound Interest A = P(1 + r)

Challenging… Interest Rates and Savings By: Nicole Sandal.

Simple and Compound Interest Unit 4 - Investing. Determining Simple Interest I = p * r * t Interest = Principle X Rate X Time ( in years)

Applications of Percent

5-5 Simple Interest. Video Tutor Help Finding simple interestFinding simple interest (5-5) Simple Interest Khan Academy Simple interest.

Warm-up What is 35 increased by 8%? What is the percent of decrease from 144 to 120? What is 1500 decreased by 75%? What is the percent of increase from.

Do Now #5 You decide to start a savings. You start with 100 dollars and every month you add 50% of what was previously there. How much will you have in.

Compound Interest. homework Worksheet: Compound Interests.

Interest Applications - To solve problems involving interest.

Week 13 Simple Interest. Lesson Objectives After you have completed this lesson, you will be able to: Represent or solve simple interest problems. Solve.

Simple and Compound Interest

Calculating and Comparing Simple and Compound Interest

Sullivan Algebra and Trigonometry: Section 6.6

Section 6.7 Financial Models.

Section 5.7 Financial Models

Section 4.7 Compound Interest.

8.3 Compound Interest HW: (1-21 Odds, Odds)

CDs and Annual Yield Lesson 7.3.

Lesson 7.7 Simple and Compound Interest

SECTION 5-5 Compound Interest pp

Simple and Compound Interest

4.6 Compound Interest.

HOW TO MAKE MONEY WITHOUT DOING ANY WORK

CDs and Annual Yield Lesson 25.

More Applications of Percents

Lesson Quizzes Standard Lesson Quiz

Presentation transcript:

16.2 Saving and Investing How can you save money by investing small amounts of money regularly?

ADDITIONAL EXAMPLE 1 Suppose you have two savings accounts, both with a principal of $200 and an interest rate of 5%, but one earns simple interest and one earns interest compounded annually. Which account will earn more interest after 20 years? Explain. The account with the compound interest earns more. The account that earns simple interest will earn $200. The account that earns compound interest will earn $330.66.

16.2 LESSON QUIZ 8.12.C, 8.12.D Fred and Melissa make regular deposits to a savings account. They both deposit $100 at the beginning of each year. Fred’s account earns simple interest at a rate of 4%. Melissa‘s account earns interest compounded annually at a rate of 4%. 1. How much interest does Fred earn at the end of the first year? $4 2. How much interest has Fred earned altogether by the end of the fifth year? $20

Fred and Melissa make regular deposits to a savings account Fred and Melissa make regular deposits to a savings account. They both deposit $100 at the beginning of each year. Fred’s account earns simple interest at a rate of 4%. Melissa‘s account earns interest compounded annually at a rate of 4%. 3. How much interest does Melissa earn at the end of the first year? $4 4. How much interest has Melissa earned altogether by the end of the fifth year? $21.67

Fred and Melissa make regular deposits to a savings account Fred and Melissa make regular deposits to a savings account. They both deposit $100 at the beginning of each year. Fred’s account earns simple interest at a rate of 4%. Melissa‘s account earns interest compounded annually at a rate of 4%. 5. After 5 years, how much more interest has Melissa’s account earned than Fred’s account? Give your answer in dollars and as a percent. $1.67; about 8.4%

A riddle to solve When invested at 5% simple interest, I earned my owner $285.75. But I cannot remember how many years it took. If I had been invested at 5% interest compounded annually, I could have earned my owner $350.09 after the same number of years. Of course, after the first year, I would have gotten my owner $31.75 from either bank. How much money am I? How many years have I been in the bank? $635; 9 years

How can you save money by investing small amounts of money regularly? Sample answer: You can earn simple interest or compound interest on the money you invest. If you make regular deposits, the amount of interest earned each year increases over time.