6.1, 6.2, 6.4 Review

Front

If your money is compounded quarterly, what value do you use for n?

Back

4 (n represents the number of compounding periods per year, and quarterly means 4 times a year).

Front

Back

Front

Semi-Annually means how many times a year?

Back

2 (Semi-annually means twice a year).

Front

Simplify: (x^3)(x^2)

Back

Front

What is the formula for compound interest?

Back

A = P(1 + \frac{r}{n})^{nt} (A is the amount, P is the principal, r is the rate, n is the number of times interest is compounded per year, t is the time in years).

Front

What does 'compounded semi-annually' mean?

Back

Interest is calculated and added to the principal twice a year.

Front

What is the value of n for annual compounding?

Back

1 (n represents the number of compounding periods per year, and annual means once a year).

Front

Back

1 (Any non-zero number raised to the power of 0 is 1).

Front

What is the balance after 18 years for $1,500 at 8.25% compounded semi-annually?

Back

$6,427.94 (Use the compound interest formula to calculate).

Front

Back