Chapter 10 Money Percentage Tipping 15 is usually considered a normal tip How much would you have to tip for a bill 640 096 15425 2314 9987 1498 Simple Interest APR Annual Percentage Rate ID: 343471
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Slide1
Discrete Mathematics
Chapter 10
MoneySlide2
Percentage
Slide3
Tipping
15% is usually considered a normal tip. How much would you have to tip for a bill:
$6.40
$0.96$154.25$23.14$99.87$14.98Slide4
Simple Interest
APR: Annual Percentage Rate
Interest Rate
PrincipalSlide5
Simple Interest
Only original money will gain interest
You have $1000 in a savings account when you open it. The bank gives you a 5% interest rate. After 5 years how much interest will be earned?Slide6
You will have that for 5 years
After 5 years you will have earned $250
Slide7
Simple Interest Formula
Slide8
Saving Bond
Suppose that you buy an $875 savings bond that pays 4.28% annual simple interest. Determine the future value of the bond after
Four years
$1024.80Five years$1062.25Ten years$1249.50Slide9
Suppose that you buy a $10,000 bond that pays 5% annual simple interest. When you cash in the bond, you have to pay 15% federal taxes on the interest you earned. How much money would you net if you cash in the bond after five years? Round to the nearest penny.
$12,125Slide10
A loan of $5400 collects simple interest each year for eight years. At the end of that time, a total of $8316 is paid back. Determine the APR for this loan.
6.75%Slide11
Problems
Page 392
#2-30 evenSlide12
Compound Interest
The previous amount is effected by the interest.Slide13
$100 at 5% APR
Simple
$105
$110$125$150$200$250$300$350$400Compound$105.00$110.25
$127.63
$162.89
$265.33
$432.19
$704.00
$1146.74
$1867.92Slide14
Annual Compound Formula
Slide15
Compare Simple and Compound
Simple
Annual Compound
Slide16
Compound Interest
You want to save for a cruise. You need $2000 but right now you only have $875. You decide to invest it in a savings account that offers 6.75% APR and it is compounded annually. How much will you have in 7.5 years?
$1382.24
How much would you have to originally invest?$1266.06Slide17
Compound Monthly
Now the same bank offers you the same interest rate but compounded MONTHLY. How much will you have saved after 7.5 years?
Slide18
General Compound Interest
Slide19
$875 at 6.75%
Compounded
After 7
yearsAnnuallyQuarterlyMonthly
Daily
Hourly
Minutely
Secondly
Compounded
After 7 years
Annually
$1382.24
Quarterly
$1397.98
Monthly
$1401.64
Daily
$1403.44
Hourly
$1403.50
Minutely
$1403.50
Secondly
$1403.50Slide20
What did you see
They all approached a number
$1403.50Slide21
Continuous Compound Formula
aka PERT
Slide22
Problems
Page 393
#32-50 evenSlide23
Fixed Deferred Annuity
Slide24
After a child is born the parents decide to put aside $100 a month in a trust fund to help save for college. The interest rate is compounded monthly at 6%. How much will be saved after 18 months?
T =
216
p = 0.005L =100.50Slide25
Installment Loans
Slide26
New Car
The price of a new car is $23,995. You have a $5,000 down payment and the dealer has two offers that you can choose from. The first is a $2,000 rebate, the second is 0% APR for 60 months. The normal interest rate is 6.48%. Which is the better deal?
0% for 60 months
$316.59 to $332.37Slide27
Problems
Page
395
#64-80 even