7.3 Modeling Growth & Decay

7.3 Modeling Growth & Decay

Multiple Choice

How do your write 13% as a decimal?

• 0.13

• 1.3

• 0.013

• 0.0013

Multiple Choice

How do you write 6.4% as a decimal?

• 0.64

• 0.064

• 6.4

• 0.0064

Multiple Choice

How do you write 8% as a decimal?

• 0.8

• 0.08

• 8.0

• 0.008

Compound Interest Formula

This is important! Write it down in your notes!

Example:

• Principal = $46,000 (the amount she starts with)

• interest = 5% (write it as a decimal 0.05)

• time = 10 years

So in our formula...

•  $A=46000\left(1+0.05\right)^{10}$  

• Put it in your handy dandy calculator!

• After 10 years, she makes $74,929

Multiple Choice

Which of the formulas correctly represents the situation: Simone has a savings account with $925. She earns 2.5% interest compounded annually. How much money will be in the account after 14 years?

• $A=925\left(1+0.025\right)^{14}$

• $A=925\left(1+0.25\right)^{14}$

• $A=925\left(1+2.5\right)^{14}$

Fill in the Blanks

Write the interest formula for the following scenario: Eddie deposited $5000 in an investment account earning 14% interest, compounded annually. To the nearest cent, how much will Eddie have in 24 years?

DO NOT USE SPACES. USE THE ^ FOR EXPONENTS

Depreciation

• When the value of something goes down at a constant rate (like a car)

• Our formula changes a little bit

•  $A=P\left(1-n\right)^t$  

• Now, there's a minus sign in parenthesis instead of a +

Fill in the Blanks

Tom spent $29,413 for a new car. The car will depreciate 11% each year. What will the car be worth after 2 years? Round your answer to the nearest cent. Do not include the dollar sign in your answer.