3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Learning Goal
answer problems with Simple Interest and Compound Interest
Simple and Compound Interest
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Year Interest Amount
0 1000.00
1 100.00 1100.00
2 100.00 1200.00
3 100.00 1300.00
4 100.00 1400.00
5 100.00 1500.00
Year Interest Amount
0 1000.00
1 100.00 1100.00
2 110.00 1210.00
3 121.00 1331.00
4 133.10 1464.10
5 146.41 1610.51
Simple Interest Compound Interest
Invest your money...
You have $1000 to invest
The bank gives you 10% interest
How much money will you have after 5 years
Do this without using any formulas
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Year Interest Amount
0 1000.00
1 100.00 1100.00
2 100.00 1200.00
3 100.00 1300.00
4 100.00 1400.00
5 100.00 1500.00
Year Interest Amount
0 1000.00
1 100.00 1100.00
2 110.00 1210.00
3 121.00 1331.00
4 133.10 1464.10
5 146.41 1610.51
Simple Interest Compound Interest
What is the difference between the two?
Simple - interest is only calculated on the original amount deposited (principle)
Compounded - interest is earned on the original amount (principle) and the interest already earned
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Exponential Growth of Money
Compound Interest FormulaFuture Value - total amount after a certain period
A = P ( 1 + i ) n
amount in the future
principal
interest rate/compounding period
number of compounding periods
principle
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Compounding Period
annually semiannually monthly biweekly weekly daily
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
But how often do banks pay interest ?
How much will you have after 2 years if you deposit
$1000 the bank at 12% per year paid annualy.
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
How much will you have after 2 years if you deposit
$1000 the bank at 12% per year paid monthly.
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Some Practise for you ....
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Some Practise for you ....
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Investigate Interest Rates
Borrowing Line of Credit
Credit Card
Mortgage
Student Loan
Saving Chequing
Savings
GIC
Canada Savings Bond
Other Options: Stocks
Mutual Funds
Annuities
RRSP
RIF
3U 8 day 6 Simple and Compound Interest SNOW DAY.notebook
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January 11, 2018
Homework
Pg. 481 # 5acePg. 490 # 1, 3, 5, 14, 15Pg. 499 # 3ab, 8