Compounding Interest & Finding Inverses

Front

What is the process to create a table for the inverse of a function?

Back

Switch the x and y values.

Front

Can the inverse of a function always be considered a function?

Back

No, the inverse of a function may not always be a function.

Front

In the function g(x) = 200(1.25)^x, what does the value 200 represent?

Back

The initial dollar amount put in the bank.

Front

What is the interest rate in the function g(x) = 200(1.25)^x?

Back

25%.

Front

How do you calculate the total amount paid on a loan with compound interest?

Back

Use the formula A = P(1 + r/n)^(nt), where A is the amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

What does 'compounded annually' mean in the context of loans?

Back

Interest is calculated once per year on the principal amount.

Front

What is the formula for calculating compound interest?

Back

A = P(1 + r/n)^(nt), where A is the total amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

If a loan of $195,000 is taken at an interest rate of 4.3% compounded annually, how do you find the total amount paid after 30 years?

Back

Use the compound interest formula with P = 195000, r = 0.043, n = 1, and t = 30.

Front

What is the significance of the initial amount in a compound interest problem?

Back

It is the principal amount on which interest is calculated.

Front

What does it mean for a function to have an inverse?

Back

An inverse function reverses the effect of the original function.