A thorough explanation of Compound interest.
Two practical cases:
1. Interest:
Marisa invests $300 at a bank that offers 5% compounded annually.
a.) What is the growth factor for the investment?
b.) Write an equation to model the growth of the investment.
c.) How many years will it take for the initial investment to double? And to be $1000?
2. Depreciation:
Matt bought a new car at a cost of $25,000. The car depreciates approximately 15% of its value each year.
a.) What is the decay factor for the value of this car?
b.) Write an equation to model the decay value of this car.
c.) What will the car be worth in 10 years?
d.) When will the car be worth $100?
Well, some questions need this:
Yes, it’s time for a new operation: logarithms.
Introduction to logarithms.
