#2.24 - 1st Semester Review Bonus 2024

Front

What is the formula for continuous compounding?

Back

A = Pe^(rt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (decimal), and t is the time the money is invested for in years.

Front

How do you calculate the total amount after compound interest is applied quarterly?

Back

Use the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, P is the principal amount, r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the number of years.

Front

What is the effective interest rate for an account that compounds interest quarterly at a nominal rate of 5%?

Back

The effective interest rate can be calculated using the formula: (1 + r/n)^(nt) - 1, where r is the nominal interest rate, n is the number of compounding periods per year, and t is the number of years.

Front

If you earn $1000 weekly and the agency takes 15% of your first 4 weeks' salary, how much do you owe the agency?

Back

You owe the agency $600, calculated as 15% of $4000 (4 weeks x $1000).

Front

What is the ratio of investment between two partners if one invests $71,500 and the other invests $143,000 - $71,500?

Back

The ratio is 4:8, which simplifies to 1:2.

Front

How do you find the percentage ownership of an investment?

Back

Percentage ownership can be calculated by dividing the amount invested by the total investment and then multiplying by 100.

Front

What is the total amount in an account after 2 years if $7000 is invested at 5% interest compounded quarterly?

Back

The total amount is $7725.50, calculated using the formula A = P(1 + r/n)^(nt).

Front

What is the balance of an account after 24 months if $6000 is deposited at 3.6% interest compounded quarterly?

Back

The balance is $6445.86, calculated using the formula A = P(1 + r/n)^(nt).

Front

What does it mean for interest to be compounded continuously?

Back

Continuous compounding means that interest is calculated and added to the principal at every possible instant, leading to exponential growth.

Front

How do you calculate the total amount after 10 years with continuous compounding at 4.5% on $18000?

Back

The total amount is $28000.50, calculated using the formula A = Pe^(rt).