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Compound Interest
A12 'i4=3
03
2×12=24
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2¥25 (l÷lo)xko%
kilo l% 0,1% .
Compound Interest y Interest that is compounded (paid,
calculated) more than one time y You get interest on interest y It makes money grow quickly y How we got the correct answer to
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SooAHAB20 $soo
$520 20$1520
5200.gl20.80
$520 +20.80=511540.80
540.800k£ $540.8021.63 21.63
562.43 $5627.4
$562.43 $6243- 500.00
-$62.43
036512421
12 243 : 8
1 : 46
$10000.04 1 $40 $1040$10400.04 1 $4160 $1081.60
$1081600.04 I $43.2619112486a
I=l¥oooko .o4k .)= $40
:1,26--1/2=0.54 times
4
I $1000 0.05 0 . 5$25 $1025T$fsooSo5$2s63$fSo . 63T.no#ino76.9o
2 WHO 0.0505 $26.92 $1103.82$103.82
When is compound interest good? y When you invest money
When is compound interest bad?
y When you owe money
Example y Charlie invests $3000 at 4% per year,
compounded quarterly for 5 years. y a) What was the amount after 5 years y b) How much interest was earned