Financial Planning & Money Management Business Math Compound Interest Compound Interest sum of the original principal

l and its compound interest. Interest period the time (daily, monthly, quarterly, semiannually, or annually) Calculating Interest semiannually di!ide the interest rate "y # Calculating Interest quarterly di!ide the interest rate "y $ %&ample '(,))) deposited into an account that pays *+ annually for # years. (,))) , .)* ,( (first year) - '*) (,))) . *) - (,)*) (,)*) , .)* , ( (second year) - */.*) (,)*) . */.*) - '(,(#/.*) 0o1 compound it quarterly (e!ery / months) (st *+ di!ided "y $ quarters in a year - (.2+ per quarter (,))) , .)(2 - (2.)) ((st quarter interest) (,))) . (2 - (,)(2 (,)(2 , .)(2 - (2.#/ (#nd quarter interest) (,)(2 . (2.#/ - (,)/).#/ (,)/).#/ , .)(2 - (2.$2 (/rd quarter interest) (,)/).#/ . (2.$2 - (,)$2.*3 (,)$2.*3 , .)(2 - (2.*4 ($th quarter interest) (,)$2.*3 . (2.*4 - (,)*(./5 (at end of (st year) 1,061.37 On Your Own: (year 2)

On Your Own Ca!"u!ate t#e "ompound amount and interest at t#e end o$ a 2%year period. &#e ori'ina! prin"ipa! is (3,000 at 7 )* "ompounded annua!!y. 1. Interest $or $irst year ++++++++++++++++++++

2. Interest $or se"ond year ++++++++++++++++++++ 3. Compound amount ,. Compound interest ++++++++++++++++++++ ++++++++++++++++++++

Ca!"u!ate t#e interest, "ompounded annua!!y. -rin"ipa! /0,100 .ate 0* &ime (years) 2 Compounded Interest

/2,100

7*

Ca!"u!ate t#e interest 3 tota! amount, "ompounded 4uarter!y. -rin"ipa! /2,000 .ate 0* &ime (years) 2 Compounded 5mount Compounded Interest

/1,00

0*