A1U8 Test Review

Front

What is depreciation?

Back

Depreciation is the reduction in the value of an asset over time, often due to wear and tear or obsolescence.

Front

How do you calculate the value of an asset after depreciation?

Back

Value after depreciation = Initial value × (1 - depreciation rate) ^ number of years.

Front

What is the formula for exponential decay?

Back

f(x) = a(1 - r)^x, where 'a' is the initial amount, 'r' is the decay rate, and 'x' is time.

Front

What is the difference between exponential growth and exponential decay?

Back

Exponential growth increases over time, while exponential decay decreases over time.

Front

What does compounded interest mean?

Back

Compounded interest is interest calculated on the initial principal and also on the accumulated interest from previous periods.

Front

How do you calculate the future value of an investment with compound interest?

Back

Future Value = P(1 + r/n)^(nt), where 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 is the growth factor in compound interest?

Back

The growth factor is (1 + r), where r is the interest rate.

Front

How do you find the balance in a savings account after a certain period?

Back

Balance = Initial deposit × (1 + interest rate/n)^(nt), where n is the number of compounding periods per year.

Front

What is the formula for calculating the balance of an account with daily compounding interest?

Back

Balance = P(1 + r/365)^(365t), where P is the principal, r is the annual interest rate, and t is the time in years.

Front

What is the significance of the interest rate in savings accounts?

Back

The interest rate determines how much money will be earned on the principal over time.