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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Presentation transcript:

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 + r) t I = Interest P = Principle r = rate t = time

Which would you rather have….. $1,000,000 or start with a penny and each day you double that amount for 30 days 11,000, ,000, ,000, ,000,0001, ,000, ,000,0002, ,000, ,000,0005, ,000, ,000,00010, ,000, ,000,00020, ,000, ,000,00041, ,000, ,000,00083, ,000, ,000,000167, ,000, ,000,000335, ,000, ,000,000671, ,000, ,000,0001,342, ,000, ,000,0002,684, ,000, ,000,0005,369, ,000, ,000,00010,738,058.24

What is the interest on a house loan for 30 years with a 4% interest rate when you borrow $125,000? P = 125,000 r = 4% t = 30 years …… ,000 ( ) 30 The total for your loan is $405, At the end of the 30 years, how much interest did your home really end up costing you? Interest = Total balance - Principle I = B - P 405, – 125,000 = $280, Your home really ends up costing you $405, Your house payment would be $1,126.18

The amount of ______ either being borrowed or saved A ____, that will need to be converted into a ___________ The amount of ________ in ________ Compound Interest I = Interest P = Principle r = rate t = time

Which would you rather have….. $1,000,000 or start with a penny and each day you double that amount for 30 days 11,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000

What is the interest on a house loan for 30 years with a 4% interest rate when you borrow $125,000? P = r = t = The total for your loan is $ At the end of the 30 years, how much interest did your home really end up costing you? Interest = Total balance - Principle I = B - P ___________ - __________= $ Your home really ends up costing you $ Your house payment would be $