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Today in Precalculus

Today in Precalculus. Go over homework Need a calculator Notes: Annuities (Future Value ), there is a handout Homework. Annual Percentage Rate (APR). Often accounts are given an APR. This assumes the interest is compounded only once a year.

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Today in Precalculus

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  1. Today in Precalculus • Go over homework • Need a calculator • Notes: Annuities (Future Value), there is a handout • Homework

  2. Annual Percentage Rate (APR) • Often accounts are given an APR. • This assumes the interest is compounded only once a year. • To determine the compounding interest rate divide the APR by the number of times in a year the interest is compounded.

  3. Annuities • A sequence of periodic payments instead of a lump sum. • Ordinary annuities are when the deposits are made at the end of each period at the same time the interest is posted in the account. FV: future value R: amount of each equal payment i: interest rate (if given APR, divide by number of payments in a year) n: total number of payments

  4. Example 1 Given APR and interest is compounded quarterly so divide i by 4 =$64,952.14 Betsy invested $250 × 4 × 25= $25,000 So she made $64,952.14 - $25,000 = $39,952.14 in interest which is a return of 160% on her investment.

  5. Example 2 Given APR and interest is compounded twice a year so divide i by 2 =$15,993.37

  6. 15,000=73.919R R=$202.92 Josh needs to deposit $202.92 each month Example 3 Given APR and interest is compounded monthly so divide i by 12

  7. Homework • Pg 341: 13-16, 47-50 • Chapter 3 test: Friday, January 6

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