Ain of pone an Latium 2: Apo in Fane Chvisine invested $2500 for 4 years compounded Se annually ad received $843.26, ir Interest: What wasthe annual ate of nto? eye Aed5904 EN.9b6> 73M 26 Peasga A e(iti - ie inf e nay 5 3M ab : rane was . fei) . Barbara invests $8(00 in an account which pays compound interest of 6% per annum ‘monttiy. How long would it take, in years and months, for her investment tc ‘double in value? a= Yoooo A PCI pon Lose. P= 3090 0) sy SOF 7 BGR oor 1222. (Hoosy> | v mn 000 ~ | 134 \ 00 a= 005" Ja rveowdi y Borrowing Money 105) gag = A te 21m ones sommes thn samp orwell] Cennin fixed pero of ting. I dela pao none payment at the end ofthe oan period, then he compound interest orm an be wsed. If repayments are made on a regular basis during the period of the loan, the compound imerest formula camot be used. Andrea borrows $7500 from her parents to buy new car. Her parents charge her interest a the rate of 4% p.a. compounded quarterly. When she pays off the loan, she has to pay S78" interest. What as he length of the tan, ® B W008 Ter BE £085 - WSoofo)™ — '9g,. 54 Is90 tad 1D. 0.01 50 h nen ‘Complete Assignment Questions #1 - #11 Nelg quotas 2 s2mek Assignment oh years 1. Calculate the simple iterestin each case. 2) S740 is invested at 6% per annum for six months THO Xc-0bx "ia = 42a.d0 by) $150 js inveed at afr 3 months. {S00 X0.08 * Fy = h3o246 Applications of Exponential and Logarithmic Funetons Lesson #2: Application in Finance 2. the annual rae of inert is 9% per annum, tate the iterest ate per compounding pric and the total number of compounding periods in cach case: = a) compounded semi-annually for 4 years b) compounded quarterly for 3 years whos ASIo, FRSA XY B vale Anaad. prieds 2 4x3-13, «) “compounded monthly for 4/2 years) compounded annually fr 6 years rok kee Wh, Fariods Ns Wak = 79. # periods = (5 3. $1000 is invested for 4 years at an anal interest rate of 7.2% 2) Complete the table to calculate the final value ofthe investment if interest is ‘compounded according tothe period of time given inthe table. anieray | Taal Naber] Tere Rate Reto | Pett ber | compélnaing| Compounding} AS" | Amount Tea” | Comics | Compre Asualy l xy 74 Hove (Lori! $. S28. 5.5 Semi-anmuay] We Yono(.036)* | 5308.04 fount | 4x4 ale oo(t ois | s3al.3& mow T [Axiade] Bown [telton)] a 5330.49 'b) If the interest is compounded continuously, then the formula A = Pe“ can be used, ie ea compo cement sg acl a iy cae et 100 ive oes an al inst te pl nl aut A silos oom ° A Aocoe HO dooe AE § 5535.03 4) Use the formula in b) i) to determine the annual interest rate to the nearest tenth of percent, ifn investment, compounded continuously, doubles in valve in 1 years B00 >4ome™ —(nl)= Info") K>In2-_ 9g 0b30.. ace Ind 7K " annual vat > 6-3 4. The function represented by the compound interest formula is an exponential function —— a) What isthe base of the exponential function represented by the compound interest formal Ys ( 'b) How does the exponent in the compound interest formula compare with the exponent it the exponential function y = ab" sexponent no compocrd teest formula 6 = X = dilocant danwatns,Applitions of Exponential and Logarithmic Functions Lesion #2: Applications in Finance @ oats How ny mods wife team aleas S00 ect ee he X00 fr (tri) vy logh® 2 1.32... 3000 3e00 > 3000 (1.01) ighal TOA 50-01 3459 | |.01"” — will take [F months RO po can @ [east Ho00 in nen La > (ol 7 intrest . lay, hae no ho 6. The value of an investment is given by fx) = 2600(1.062), where isthe numberof year for which the investment is held. 8) What isthe annual interest rate interest is compounded anally? (.) Ds » Dae eee investment is worth east $6000, Geno -atoo(I0ha)*- 109,45 5) °X it willtake 4 $2. j.043* xf ne . FS nainflde @ «obs ia voy. \ 713,90.. fouatk ok las} 7 Aste ta 50, Ine sched 2a syacenan oo Sartori. ase ted AS i yoo Ar-oas PP (ri) Nod) ous P-tooo 6496 > tooo (i-eas) jog (5) BEATE Voas se , cox nen loguoas“ =60 Poteet gay fe tooo (000 = 3a00 (+7) 3 oe 73000 .\a0 ei ae(lri) Darualake = 4 (0%3%) @Vs30 Belay ie \.opsab +t! — page 71248 Ayplications of Exponential and Logarithmic Functions Leson 72: Applications in Finance 9. Mary-Ann invested $3500 in a Canada Savings Bond at an interest rat of 4% per year @ compounded monty. Carlos invested $3000 in aG.1.C. at an interest rate of 6.8% per year comounded sual. After aw many years wlth wo neste be 4) approximately equalin vale? ob puselgx of years 2X « leg obey ots wary Ann ——Onslos 14 o4s)**. 068% p> 3800 93000 shos) xolaadd 6 x ireaste ots j-oaty | toqt rloff.o43™> log(-068) ce nee figs pac) = hee) a4 x | gt 2 xlog (|-ol8) ~ laxlog]-olS 4 : Lob 4 oo(lets)* + Zoulii)® | TE” x oghob® algo BRM Sesser reeten amay e mt ‘ey he sent wl te to Seach Yaseen ean a ee Kotoo(tiod)™ fatdor lot _ | .o8lb © toss. tte “lotlly Too) 111. George invests $2500 in an account which pays compound interest of 8.1% per annum ‘compounded quarterly. The number of quarters it wil take George's investment to atTeast double in value is = (Reco sour severin te mmescapone box omietionit) [3] PeS000 F000 > dS00(1-030aS) eae 3 0.0308S" artoaoas™” nn 7 H-ST wnt lo) poae% > 73S quarkrs - Tyne by 2. a) 45% 4 8) 2398.2 ©) 0758, SH) 98.6 Sal gcabiencow by ayssiso8 ne 4-00.07 | 5509250 4-000. 330805 40m 06" gs 4a isi 1) Theexponent mint compound intrest formula sequal os, but the set of values for mis discrete, whereas the et of ales for = continuous, the domains of he functions are pot the Same. e' 6a) 62% Bis Te Sys 8. IS TS 1.¢ n