|
SECTION |
MEMORIZE AND KNOW HOW TO USE! (PS: YOU ARE ALLOWED A 3x5 CARD) |
PROBLEMS |
|
4A |
Know how to prorate. |
Exercises – 37, 39 Quiz |
|
4B |
Know difference between simple and compound interest. And be able to compute both (see example 3). A = P(1+APR%/n)(nY) APY = (Absolute One Year Increase)/(Starting principal) Continuous Compounding A = PeY·APR |
Example - 3 Exercises - 49, 51, 53, 57, 61, 63, 65, 73, 77 Quiz |
|
4C |
Total Return = (A-P)/P Annual Return = (A/P)(1/Y)-1 Savings Plan Formula - A = PMT((1+APR%/n)(nY)-1)/(APR%/n) Know about Stocks and Bonds (See example 7, 8, 10) |
Examples – 7, 8, 10 Exercises – 45, 49, 53, 55, 61, 65 |
|
4D |
Loan Payment Formula - PMT = P(APR%/n)/(1-(1+APR%/n)(-nY)) Mortgages and Closing Costs |
Exercises – 25, 31, 37, 39, 49, 51, 53 |
|
8A |
Know when growth is linear and when exponential. Be able to sketch a graph illustrating both. Understand parable 1, 2, 3 |
Example - 1 Exercises – 19, 21, 27, 31, 35, 40 |
|
8B |
Be able to graph exponential and linear decay Approximate Thalf ≈ 70/P Approximate Tdouble ≈ 70/P Q = Q0(2)(t/Tdouble) (For exponential growth) Q = Q0(2)(-t/Thalf) (For exponential decay) Thalf = -log10(2)/log10(1+r) Tdouble = log10(2)/log10(1+r) (Remember it doesn't matter what base you use for log as long as it's the same top and bottom) Know when approximate can be used Study the log review on page 531 Be able to solve for variables in exponents Be able to figure out half life and/or doubling time given a graph. Understand the Carbon-14 example worked out in class |
Examples – 5, 8, 9 Exercises – 35, 39, 47, 49, 55, 57, 59, 61, 63, 65 |
|
8C |
Logistic Growth Rate = r(1-P/C) Know about carrying capacity, overshoot, collapse and how logistic growth compares with exponential. Figure 8.4 Growth Rate = Birth Rate – Death Rate |
Example – 1, 2, 3 Exercises – 23, 25, 27, 29, 35 |
|
9C |
Q = Q0(1+r)t Know what the exponential function looks like – Figure 9.17 – and understand it's sensitivity to growth rate. Be able to use the exponential function in all three forms. Understand Examples 2, 3, 4, 6 |
Examples - 2, 3, 4, 6 Exercises – 37, 39, 49, 51, 53 |
QUIZ SOLUTIONS
[10 points] I) What is the annual interest payment if you maintain an average balance of $650 on your credit card
with 18% annual interest rate?
0.18*$650 = $117
[10 points] II) If Sarah pays $4500 twice for tuition and fees for Fall and Spring Semesters and $1500 for Summer,
prorate these expenses to find how much it costs every month for Sarah to attend school?
$(2*4500 + 1500)/12months = $875/month
[10 points] III) You take a short term loan of $3600 for 3 months at 12% APR compounded monthly. What is the interest
you have to pay on this loan at the end of three months? If the interest was compounded continuously, would the
interest be less or more? (Hint: Interest is A-P)
remember n = 12 and Y = 3/12 years,
so interest is $3600*(1+12/(12*100))^(12*3/12) – $3600 = $109.08