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Business Math

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Simple interest is the interest that is computed on the original principal only. If I denotes the interest on a principal P (in dollars) at an interest rate of r per year for t years, then we have I = Prt The accumulated amount A, the sum of the principal and interest after t years is given by and is a linear function of t. A= P + I = P + Prt = P(1 + rt) A bank pays simple interest at the rate of 8% per year for certain deposits. a. If a customer deposits $1000 and makes no withdrawals for 3 years, what is the total amount on deposit at the end of three years? P = 1000, r = 0.08, and t = 3 A=P(I+rt)=1000[1+(0.08)(3)]=1240 or $1240 b. What is the interest earned in that period? I=Prt=1000(0.08)(3)=240 or $240. Compound …show more content…

Here, A = 20,000, r = 0.06, m = 12, and t = 3. P=A(1+(r/m)^(-mt) = 20000 [1+(.06/12)]^ (-12)(3) = 16713 How much money should be deposited in a bank paying a yearly interest rate of 6% compounded monthly so that after 3 years the accumulated amount will be $20,000? Here, A = 20,000, r = 0.06, m = 12, and t = 3. P=A(1+(r/m)^(-mt) = 20000 [1+(.06/12)]^ (-12)(3) = 16713 How long will it take $10,000 to grow to $15,000 if the investment earns an interest rate of 12% per year compounded quarterly? Solution A = 15,000, P = 10,000, r = 0.12, and m = 4, t=? If the number of equations is greater than or equal to the number of variables in a linear system, then one of the following is true: The system has no solution. The system has exactly one solution. The system has infinitely many solutions. If there are fewer equations than variables in a linear system, then the system either has no solution or it has infinitely many

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