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5.2 cont.)
Ex.1
If \$10,000 is invested for 4 years at an annual rate of 8%
(simple), how much will the account be worth at the end of
4 years? If the interest was compounded yearly, how much
will the account be worth after 4 years?
Ex.2
You borrow \$2000 at an interest rate of 20%. How much
interest is due in 39 weeks?
5.2 cont.)
Ex. 3
If \$1000 is invested at 5%
a) simple interest
b) compound Interest with n=1
c) compound interest with n=2
How long does it take to double?
Ex.4
What is an account worth in 8 years, if we started with
\$3000 and got continuous compounding at a rate of 6%?
5.2 cont.)
Ex.5
What amount must be invested now in order to have
\$1,000,000 for retirement in 45 years if it is compounded
quarterly at 9%?
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