ECO 3401 Quiz: Index Card #1 pdf
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Simple interest: interest = p * r * t (multiply everything) Future or maturity value for simple interest: a=p(1+rt) Effective rate: re= (1 + ) n 1. Future value of an ordinary annuity: s= r[(cid:4666)1+(cid:3288)(cid:4667)(cid:3289) 1. Present value of an ordinary annuity: p = Present value for compound interest: p = a(1+i) -n. Future or maturity value for simple interest: a company will need ,000 in 5 years for a new addition. To meet this goal, the company deposits money in an account today that pays 9% annual interest compounded quarterly. Find the amount that should be invested to total ,000 in 5 years. (solve for p) Compound interest: find the interest rate for a deposit accumulating to . 59, compounded quarterly for 5 years. Future value of an ordinary annuity: find the future value of an ordinary annuity if payments are made in the amount r and interest is compounded as given.
