- Given the compound interest formulae [math]S=P(1+i)[/math]n, transpose the equation to make P the subject.
- To get [math]P=S/(1+i)[/math]n
- Use your tranposed equation to calculate the following
- Sina is hoping to by a piece of land in 6 years time for $100,000.00. How much should she invest now if the bank offers an interest rate of 9.5%p.a. compounded annually?
- Sione's investment has matured after 10 years at 12% p.a. compounded monthly. How much did he invest if his investment earned $15,000 interest?
- Locate the natural logarithmic key on your calculator (nb most models it will be the "ln" key)
- Calulate ln .0214
- Calulate ln 5.6
- Transpose the CI formulae to make n the subject.
- To get [math]n=ln(S/P)/ln(1+i)[/math]
- Use your transposed formulae to calculate the following
- How long will it take for an investment to double given an interest rate of 9.5% p.a. compounded quarterly?
- An investment of $15,000 has a future value of $21,000 at an interest rate of 6%p.a. compounded annually. How long did it take the investment to mature?
- Locate the exponential key on your calculator (e)
- it is usually the same key as the natural logarithm but you need to access it by pressing shift first
- Calculate
- e5.0345
- e-1.23
- Transpose the CI formulae to make i the subject.
- To get [math]i=e[/math]ln(S/P)/n- 1
- Use the transposed equation to calculate
- Sui has $75,000 she wishes to buy some land in 4 years time which is worth $95,000. At what interest rate must she invest her money if it is compounded annually?
- Tiana wants to find the interest rate that will triple her investment in 6 years time compounded quarterly?
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