MATA32H3 Lecture Notes - Lecture 2: Interest
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End of 1st compound, how much money do we h(ve then? (by 1st compound is me(ns the compounding period, it c(n be. Let, r=apr for this ye(r n= number of compounds for this ye(r. S: is the end of the timeline ru: is th(t speci(l simple interest r(te. ru is the effective r(te. Simple interest is p(id (t the end of 1st ye(r only. P(1+ru)=p(1+r/n) ru= (1+r/n) -1 ru>1 when n>1 bec(use it needs to compens(te for its l(ck of compounds. : invest p (t (n apr of compounding r times (nnu(lly for t ye(rs. : we h(ve (n (mount s with (% apr compounding with the frequency of k for t ye(rs. Pv is the (mount to invest now to re(ch ( desired (mount of s. In 5 ye(rs from now, you need . = 28231. 46 ((mount of money to invest now)
