Need help with this

hi random,
I haven't looked at it very hard yet but do you want me to assume that there is no interest earned on the first $3000?
This would mean that $3600 would grow to $5944 in 7 years
is the same as $600 grows to $2944 in 7 years if all of the amount attracts interest. Does that make sense to you?
when I say, is the same, I mean the interest rate would be the same.

Don't quite understand but could you like work it out with the formulas by re-ranging and make the answer = to at every 4 months

Yeah, I think we can assume that 3600 will grow into 5944 without any interest before 3000 but could you make sure the answer is every 4 motnhs. Also could you also do one to assume there is so there would hopefully be 2 possible answer which = every 4 months

I am not surte what you are trying to tell me.
Do you already know that the answer is 4 months and your want to show that this is correct?

If you let t be the number of compounding time periods per year
then
n = 7t
and
r=0.0725/t

If you want to test 4 months then t=3 (because there are 3 lots of 4 months in a year)
n=21
r= 0.0725/3
So you can test this - i haven't done it yet.

Do you just use formuas in this course or do you sometimes use tables as well?

I think that there is something wrong with your question or with the assumptions that we are making.
if you get no interest on the first $3000 then this is the same as $600 grows to $2944 in 7 years.
That is almost a 500% growth in 7 years!

At 7.25% pa for 7 years $600 will grow to
$990.98 if compounded every 4 months
or
$996.63 if compounded daily.

Even if it was compounded by the second it would not get to $2944!

Is it per annum, there was no 'a' in your question - I thought that this was a typo.
Was it meant to be per 'something' and you work out what the something is?

This would explain my problem.

Yep it is p.a

Well, per annum will never work for the reasons that i have already given (assuming first $3000 doesn't compound)

but I just workied it out as 'per some time period' and I got an answer close to 4 months.

I will show you. Maybe this is what was meant?

131223 latex compounding interest.JPG

it is not 600 and 2444 it is:

A building society offered an interest rate or 7.25% p. on any investment over 3000 Bob deposited 3600 and recived 5944 after 7 years

Oh isn't n the years now I just read and it is compunding peroids. That confuses me I always thought n was the number of years. Then what was the year then. When n = the number of years does that mean the compounding period is 0?

Alright we are going round in circles here.
I took 3000 off both numbers because I thought no interest was paid on the first $3000. If that's not the correct interpretation and interest is paid on the whole lot try copying my method with the full amounts and see what you get.
It's hard for me to think straight at the moment because it is 2:30am and I am typing on a little phone.
See if you can make sense of it and I'll get back to you in the morning.
And yes n is the number of compounding periods.

Yeah it doesn't work I did 5944= 3600(1.0725/4)^(7x4)

Assuming the answer is every 4 months it just doesn't add up to 5944. However, if the answer was monthly I know why. We learnt that it can either be monthly quaterly and yearly. I would just check if it is yearly and if not it would be monthly however, it says quarterly or every 4 months

I see thank you so much. I understand the whole thing is about finding the interest if we assume 3000 has no interest it is not needed thus taking 3000. All I got to figure out is how come my calculator is not giving 2944 when I type this in:
600(1.0725/4)^28

We haven't been taught log signs yet so I use guess and check so therotically I will end up with 4 but when I replace it doesn't equal 2944

1. it isnt 1.0725÷4
It is 1+(0.0725÷4)

2. There are 3 months in a quarter of a year, not 4.

Thanks will keep that in future refrence however, it is every 4 months
so when I do 600x1+(0.0725/4)^7x4 or 28 it gives me
:600 not 2944

Random260:

Thanks will keep that in future refrence however, it is every 4 months
so when I do 600x1+(0.0725/4)^7x4 or 28 it gives me
:600 not 2944

I can't see the whole question here but it is (this is 3 monthly or quarterly)

600×(1+(0.0725÷4))^(4×7)

Which is different from what you had.

Ok I used your site calculator: 600x(1+(0.0725/4))^(7x4) = 992.1608741840376858
still doesn't = to the amount we want

Ok I'm putting my computer on now.5

Random260:

This is the formula. We are doing compound interest the formula is A= P(1+R)^n
A= Amount owning or earned at the end of the complete process
P= Principal
r= interest rate of period expressed in decimal
n= Number of compounding Periods

Also:
I= A-P
I= The compound interest owned over after certain amount of years
A= Amount of loan or investment after the same amount of years
P= Principal

This is question: A building society offered an interest rate or 7.25% p. on any investment over 3000 Bob deposited 3600 and recived 5944 after 7 years
So long as there is at least $3000 in the account, interest is paid on the whole lot.

1) How often was the interest compounded
Answer (I looked at it and dont know what I did wrong and how to do it) = Every 4 months

Ok I've got it sorted.
The question was poorly written to start with. You get interest on the whole lot.
secondly, every four months is 3 times each year.

so
r = 0.0725/3
n=7*3

3600(1+(0.0725/3))^(7*3) = $5944.10

this is what you wanted.
Now, it is 3:30am on Christmas eve and I am very tired.
Make sure you are happy with the answer.
You probably should think about it properly before you decide that you are happy.
If you are not entirely happy then please post again, but give yourself time to think about it first.
When you are happy I am sure that this is one time I am owed a big thank you.
Have fun with your calculations.
Good night.

Thank you so much . This forum is awesome lol. Might use it more often but it is sad there is only 1 person answering questions. Oh so the answer should have been 3 times a year. Butt they written it every 4 months

Random260:

Thank you so much . This forum is awesome lol. Might use it more often but it is sad there is only 1 person answering questions. Oh so the answer should have been 3 times a year. Butt they written it every 4 months

It is 3 times a year because the interest rate was given as yearly.

I would like you to do this question so that I can check that you understand.
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Htet Htet invested $500 for 6 years
The interest rate is 8% per annum compounded monthly.
What is n and what is r and what will it grow to?
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Htet Htet probably sounds like a really weird name.
I have taught two girls called Htet Htet. They were from Myanmar (used to be called Burma)
It was pronounced t t
It is impossible to say this name loudly. It has to be a whisper.
One of the girls was very quiet and the name suited her.
The other was a confident young lady and she used an anglicized (normal Australian) name instead.
I just thought I would throw in this bit of trivia.
----------------------------------------------------------------------------------------------------------------
I am posting under Melody2 because for some reason the system won't allow me to log in.
Melody.

Thanks for your dedication I will do asap.

Seems simple. R= 0.08/12 = 0.00666667
n= 12x6 =72
500(1+(0.08/12))^6*12 = 6244

Random260:

Seems simple. R= 0.08/12 = 0.00666667
n= 12x6 =72
500(1+(0.08/12))^6*12 = 6244

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Okay random,
your r and n are correct. Good work.

Now think about your answer. You should always do that.
You invested 500 at 8%pa for 6 years.
Do you really think that you could end up with $6244. That's more than 12 times more than you started with or more than1200% what you started with.
does this seem right to you?? That is a serious question. If your serious answer is "I don't know" then I should talk with you more about that.

You put the numbers in the right places but you did do something wrong. Can you find your error?

Happy calculations
Melody.

$6244 - 500 = How much he got in investment

Sorry, You'll have to try again.

So typed in calculator wrong. Answer 806

Random260:

So typed in calculator wrong. Answer 806

500(1+(0.08/12))^ (6*12 )

Better still $806.75

Well,you actually left an important set of brackets out of the equation.
You put it into your calculator exactly as you wrote it so the real problem was that you wrote it down wrong.

Still, I think that you deserve a reward for getting it right.
I know that you are not a little kid, but I am!
kangaroo, frill neck lizzard and kookaburra.JPG

There is a couple of things I want to mention.
1.
(1+(0.08/12)) = (1+0.08/12) because you and the calculator both know that division is done before addition.
It doesn't matter that you have put the brackets in, I put the extra brackets in when I was showing you because I wanted to really stress the order.
Leave them in or take them out. It doesn't matter the answer is the same.

2.
Do you understand that your first answer was much too big and it basically had to be wrong? Would you like me to discuss this more. You might get a better feel for this sort of check as you do more examples. But maybe I can help you understand. It is up to you.

3.
Do you want another one or have you had enough now?

Cheers,
Melody.

Yeah, it is up to you whether you want to or not I am fine with you giving me more question since it is good for me.

Random260:

Yeah, it is up to you whether you want to or not I am fine with you giving me more question since it is good for me.

Hi Random,
Your enthusiasm overwhelms me!
Don't worry, I understand.
One last question and hopefully we will both be happy.
Suggestions: When you do questions with a forumula, write the formula every time because it will help you to remember it.

$10500 is invested at 3.6% p.a. compounded every 3 months for five and a half years.

a) write the formula
b) what is P, r and n
c) show the substitution step
d) what does the $10500 compound to? (to nearest cent)
e) How much interest was earned?
Bonus Questions: (I know I get carried away, feel free to ignore me when you get sick of this game - just answer what you want to answer.)
f) Would the interest have been more or less if it had been simple interest? Why? (Try to answer without calculations)
g) How much interest would have been earned if it was done using simple interest? (Show the formula and the substitution)

Where are you from Random?

1) A= P(1+R)^(NxT)
2) p= 10500 R= 0.036 n= 3 months
3) 10500(1+ (0.036/3))^ (3x5.5)
4) $12784.03
5) Interest he earned is 12784.03 -10500 = 2284.03
6) More since compound increases or interest increases by a certain time
7) D****t: I think it is I=PRT
I= 10500 x 0.036 x (5.5) since simple interest the thing stays the same so
=2079

From australia.

I have put a great deal of thought into this answer and i have discarded an earlier version. I really want you to understand and you are nearly there.
however,
I am sorry you still haven't quite got it, the last question on simple interest was perfect (all except for the missing dollar sign)
Your second last question was correct and i am sure you had the right idea but it may have been better to have said something like
"With simple interest you only get interest on your original deposit. With compound interest you ALSO get interest on the interest that you have already earned.
Therefore you will get a smaller total if simple interest is used."
Part d and e would both have been right if the earlier parts had been correct.

This is an extract from your original question. All except I changed the capital R to a little r in the equation. It is always written as a little r.
This is the formula. We are doing compound interest the formula is A= P(1+r) ⁿ
A= Amount owing or earned at the end of the complete process
P= Principal
r= interest rate per compounding period expressed in decimal
n= Number of compounding Periods

As for the early bits, your main mistake is exactly the same mistake that you made before. Interest is stated as a yearly amount. It doesn't directly matter how many months are in a compounding period. What matters is how many compounding periods there are in a year.
If you concentrate on getting your r and n right the rest will be easy.
Just use the original formula that you were given A= P(1+r) ⁿ [this is the foumula that i wanted you to write down for part (a)]
r is the yearly interest rate split up into (divided by) how many times a year interest is paid.
n is the number of compounding periods which is the number of years multiplied by how many times each year the interest is paid.
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Okay now forget about the last question for a moment.
Try these questions - don't simplify the answers, you can leave them as a decimal divided or multiplied by something.

If interest was 14% p.a., (p.a. means per year) and the money was invested for 2 years
a) what would r be if it was compounded every 1 month? (Hint: how many 1month time periods are there in a year?) What would n be?
b) what would r be if it was compounded every 2 months? What would n be?
c) what would r be if it was compounded every quarter (3 months)? What would n be?
d) what would r be if it was compounded every 4 months ? What would n be?
e) what would r be if it was compounded every 6 months ? What would n be?
f) what would r be if it was compounded every day ? What would n be?

Please be patient with yourself and with me.
Even if you don't get it this time, I can explain this and you will eventually get all these questions correct

Whats wrong with my answer can you do it. I thought it was correct.

Yes, I can do it and so can you if you think about what I say!

The yearly interest rate is 3.6%
this is broken up into 3 monthly portions
There are 12 months in a years
so each portion must be 3/12 of 3.6%
and 3/12 =1/4
that is, there are 4 lots of (3 months) in a year.

r = 1/4 of 3.6% = 0.036/4 = 0.009
what will n equal?
Use the formula that your teacher gave you.

And i still want you to do the questions that I just gave you. Please!

So the expanded forumula is: P(1+R/(3/12) ^ 5.5 x (3/12) they should have expanded the formula

$10500 is invested at 3.6% p.a. compounded every 3 months for five and a half years.

Random260:

So the expanded forumula is: P(1+R/(3/12) ^ 5.5 x (3/12) they should have expanded the formula

No
Stop and think!!!
a) write the formula (the original one that your teacher gave you)
b) What is r - I already told you it was 0.036/4
c) what is n ? (that is how many lots of 3 months are there in 5 and a half years - HINT there are 4 of them in 1 year)
d) What is P
e) put P, n and r into the formula.

Tell me what you have.

So confusing.... I thought it was the number of compound peroid which is 3 x the number of years which is 5.5 but it is (12 x 5.6 = 67.2 months
67.2/3 = 22.4 why is it written as number of periods times years. So 10500(1+ 0.036/4)^ 22.4 so n is the number of times it is paid or increased the interest.

Not there yet.
But if you are as persistant as I am you will eventually tell me that you totally understand. And, when i give you questions that you can do easlily, I will believe you.
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I want to try something new.
You are in a greengrocers shop.
All the produce is bundled up in those little nets. You know, like the ones you often buy onions in.
Are you with me so far?

Now, all the apples are bundled into groups of 3. That is, every apple net has three apples in it.

Above the apples is a price sign. It says $6 for 1 dozen apples. I want 2 dozen apples.

Let r be the price of one bag of apples. How much would this be?
12 apples divided by 4 = 3 apples (This means that i will need 4 bags to make 1 dozen apples)
So if I divide $6 by 4 I will get the price of 3 apples. Does that make sense?
So r = $6/4 = $1.50
Let n is the number of bags I need to buy.
I want 2 dozen and there are 3 in bag.
4 bags would be 1 dozen
So i must need 2 x 4 bags of apples.
n = 2 x 4 bags

Now think about this carefully Random. I think that a part of your problem is that you are not thinking hard enough about what I am trying to tell you.
Do you completely understand what I have done? Tell me if you don't!

Alright I will assume that you understand.

so
If the cost is $6 for 1 dozen apples, I want 2 dozen apples, and the apples are bundled in nets of 3
(1 dozen apples = 4 nets)
so
I will need 2 x 4 nets of apples n=2 x 4
and I will have to pay 6 divided by 4 dollars for each bag r=6/ 4

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If you totally understand this you will have no problem answering this question.
The bananas are bundled in nets of 2 (2 bananas per net)
The cost is $4.08 for a dozen. And I want 14 bananas.
a) How many nets make up a dozen bananas
b) If r is the cost per net, what is r ?
c) If n is the number of nets that I need to buy, what is n?

Now don't get annoyed with me and don't go back to an earlier problem.
Just answer my questions exactly as I have asked them, and show your working- that's the important learning part.
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a) 12/2 = 6 nets
b) 14/4.08 = 1 banana
so 1 banana= 3.43
so 3.43 x 2 = $6.86 per net
c) 14/2 =7 nets

Hi Random,
I am glad that you are still with me,

This was the question:
The bananas are bundled in nets of 2 (2 bananas per net)
The cost is $4.08 for a dozen. And I want 14 bananas.
a) How many nets make up a dozen bananas Your answer: 12/2 = 6 Perfect!
b) If r is the cost per net, what is r ? Your answer: Not so good
c) If n is the number of nets that I need to buy, what is n? Your answer: 7 good.


Your answer for part b
b) 14/4.08 = 1 banana
so 1 banana= 3.43
so 3.43 x 2 = $6.86 per net

Lets think about this.
If 1 banana was $3.43 then a dozen bananas would be $3.43 x 12 = $41.16 BUT a dozen bananas are only $4.08, so your $3.43 per banana can't be right.
Think about the words and use them to help you get these sorts of questions correct.
If you want dollars per banana You have 4.08 dollars per 12 bananas.
The per is the same as divide.
so you have
4.08/12 dollars per banana = $0.34 per banana = 34c each
check 12 x 34c = 408c = $4.08 so they must be 34c each!
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I'll get back on track later but this is really important for you to know.
REMEMBER: It is "cost per item"
a) If I buy 250 lollypops for $10. How much are they each (Show your working - that is the important bit)
show me how you checked your answer
b) If I buy a dozen eggs for $6.48 How much is each egg (Show your working - that is the important bit)
show me how you checked your answer.

Please answer these 2 questions for me.

10/250 = 0.04c each
b) 6.48/12 = 0.54 c each

random260:

10/250 = 0.04c each
b) 6.48/12 = 0.54 c each

Very good Random.
Your initial working, is excellent
I did want you to show me that you got it right by saying something like (check $0.04 x 250 = $10 ->great 4c is correct)
also
I should point out that the lollies are not 0.04c. They are $0.04 or 4c. Please be careful about this in the future.

For the eggs, I offer the same praise and the same criticism.
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Now I am going back to the fruit. This time I want 3 dozen bananas.
The bananas are bundled in nets of 2 (2 bananas per net) The cost is $4.08 for a dozen.
a) How many nets make up a dozen bananas. You already told me that this was 12/2 = 6 nets
b) If r is the cost per net, what is r ?
c) If n is the number of nets that I need to buy, what is n?

Make sure you include, r= and n= and all your working.
You will probably get this question again next time (with a little more instruction).
For now you can do it your way. But show your working.
ps I know where i am trying to go with this so be patient.

Answer the questions first but then,
If you really want to think ahead, think about how you could have used the 6 to get these answers.

1b) 4.08/12 = 0.34
1 net = 2 banana which = 0.34 x 2 =0.68
1c) 36/2 = 18 nets
couldn't post for 2 days

That's fine Random. I'm really glad that you are hanging in here.
Your answers were all what I wanted except you didn't put n= or r= and you left out the dollar sign.
I want you to put n and r because i am going to relate what you are learning now to your compound interest question and there is an n and an r in that formula.

I'm going to look at the answer a little differently. And I want you to use the picture to help understand what I am trying to tell you.

I want 3 dozen bananas.
The bananas are bundled in nets of 2 (2 bananas per net) The cost is $4.08 for a dozen.
6 nets of 2 bananas.JPG
12 / 2 = 6 That is, 6 nets make up a dozen, that 6 is the magic number for this question!

Now r is the cost for 1 net. And all 6 nets together are $4.08. So
r = $4.08 / 6 = $0.68 (for 1 net)
PLEASE NOTE THAT I DID NOT WORK OUT HOW MUCH 1 BANANA WAS FIRST.

Now, n is the number of nets that I need to buy.
I want 3 dozen bananas and 6 nets make up 1 dozen so
n = 3 x 6 = 18 nets.
PLEASE NOTE THAT I DID NOT WORK OUT HOW MANY BANANAS I WANTED FIRST.
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Okay, I'm going to stick to the same bananas
This time I want 5 dozen bananas
Same questions as before.
a) how many bananas per net ? You already know that the answer is 6. Use the 6 in the working for both the next questions.
b) Let r be the price per net. Find r
c) Let n be the number of nets that you will be buying. Find n

The working is the most important bit

r = 4.08/6 =0.68
n= 5x6 = 30 nets
ok, lets go back to the real question I am asking please. About compound interest

Ok I'll try but I'm not sure you are ready yet.
Show all your working. Do each question carefully with full working before you move to the next question.

Jo invested some money is invested at 7.2% per year. It is compounded every 2 months for 8 years.
a) Write 7.2% as a decimal
b) How many lots of 2 months are there in a year . Use this number to get the next 2 answers.
c) r is the interest rate per compounding period Find r (show working)
d) n is the total number of compounding periods. Find n (show working) and put n=
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e) What is the compound interest forumula, (n and r are little letters)
f) Substitute in the values of n and r into the equation. (you are more likely to get this correct if you put the final value of n and r in - don't try to put the working in)
(you can also simplify the equation as a next step)
----------------------------
g) If the original amount of money was $5000 what has it grown to? show the substitution into the formula.
h) How much interest has Jo earned? (to the nearest cent)

Good luck and don't try to cut corners.

Wait give me a guide on how to do this or example.

Okay Random
I will try.
Let's just look at the first question.
Jo invested some money is invested at 7.2% per year. It is compounded every 2 months for 8 years.
a) Write 7.2% as a decimal
b) How many lots (nets) of 2 months are there in a year . Use this number to get the next 2 answers.
c) r is the interest rate per compounding period Find r (show working)
d) n is the total number of compounding periods. Find n (show working) and put n=

Now I think that you can do Part a. Do you know how to change a percent to a decimal?

Even if you can't you can still try to follow what I am saying below and hence answer part b

The rest is like the banana question.
Think of a year as a dozen months
Think of the months like bananas (12 bananas in a dozen - 12 months in a year)
The months are in 'nets' of 2 just like the bananas were.
So you should be able to work out what I am trying to say for part b)

Do these 2 parts and then get back to me with your answers.

If you have a sudden brain wave (which you might) you can try the next to questions as well.
The logic is very close to the nets of bananas.

Ok, this is confusing.

1a) 7.2/100 = 0.072

1b) 12/2 = 6

1d) I couldnt do Ic but idk if this is correct (6x8) x 6 = 288 (Isn't the rate 0.076... so that means the answer needs to be 0.076)


Please explain how to do these. Like how has r is the interest rate per compounding period Find r got the relationship as Let r be the price per net. Find r

ok random,
The first 2 were well done.
I'll try to show you what compound interest and nets of bananas have in common.

Bananas
2 bananas per net
12/2 = 6 nets per dozen

$4.08 per dozen
r = $4.08 / 6 per net

We want 5 dozen bananas
n = 5 * 6 = 30 nets (that is 5 dozen and 6 nets per dozen)

Compound Interest
2 months per 'net' In this case a net is the compounding period of time. There are 2 months in each 'net'.
Interest is stated per year, there is 12 months in a year, so you can think of a year as a dozen months
12/2 = 6 'nets or compounding periods' per year

Interest rate is 0.072 per year (12 months)
r = 0.072 / 6 per 'net' or compounding period. (the interest rate for 2 months has got to be less than the interest rate per year! )
r = 0.012 (This is the interest rate per 2 months (per net)

we want 8 years worth of interest.
There are 6 compounding periods (nets) every year. so there must be 8 * 6 = 48 compounding periods (nets) in 8 years
n = 8 * 6 = 48

THINK ABOUT IT HARD FOR A WHILE THEN HOPEFULLY YOU WILL UNDERSTAND
----------------------------------------------------------------------------
Now study this question, then when you think that you have it try thiis one without looking back.
Look back and double check that it is right before you post your answers.

Tony invested some money at 4.2% per year. It is compounded every 2 months (each 'net' holds 2 months) for 4 years.
a) Write 4.2% as a decimal
b) How many 'nets' of 2 months are there in a year . Use this number to get the next 2 answers.
c) r is the interest rate per compounding period (per net) Find r (show working)
d) n is the total number of compounding periods (nets) . Find n (show working) and put n=

Give it your best Random - don't cut corners - and think really hard.
Good luck.

I get it now so the reason why it is 12/2 is beacuse that will give you compounding peroid or n then you substitue in equation. That should solve my problem and the rest is substutue so compounding period is how many (things go into another thing.) So if it was 2 months for 3 years the compounding peroid is 36/2 = 18 and to find r it is r/18 and n is n x the net or compounding period. So for me to figure it out the problem I faced for doing part b now once I did part b it all flowed.

1a) 4.2/100 = 0.042
1b) 12/2 = 6
1c) R= 0.042/6 =0.007
1c) n= 4x6 = 24 so if we put in equation

a= P(1+R)^n
A= Some money(1+0.042/6)^(4x6)

Right? Now need to remember if true.

The reason why I got stuck last time is I thought the compounding peroid is given but got to know math isn't that easy and have to find out.

Excellent. I'll give you another question tomorrow.

Hi Random,
Your answer to my question was excellent
BUT
"I get it now so the reason why it is 12/2 is beacuse that will give you compounding peroid or n then you substitue in equation. That should solve my problem and the rest is substutue so compounding period is how many (things go into another thing.) So if it was 2 months for 3 years the compounding peroid is 36/2 = 18 and to find r it is r/18 and n is n x the net or compounding period."
This beginning statement of yours doesn't make much sense to me.

We need to do some more questions.
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This is the same question as before except I changed 2 months to 3 months

Jo invested some money is invested at 7.2% per year. It is compounded every 3 months for 8 years.
a) Write 7.2% as a decimal
b) How many lots (nets) of 3 months are there in a year . Use this number to get the next 2 answers. (I'm going to call this the key number)
(if you are not totally sure, just post and tell me what key number you intend to use)
c) r is the interest rate per compounding period Find r (show working)
d) n is the total number of compounding periods. Find n (show working) and put n=
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e) What is the compound interest forumula, (n and r are little letters)
f) Substitute in the values of n and r into the equation.
(you can also simplify the equation as a next step)
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g) If the original amount of money was $5000 what has it grown to? show the substitution into the formula.
h) How much interest has Jo earned? (to the nearest cent)

Answer every question carefully, don't cut corners.
Good luck!

1a) 0.072
1b) 12/3 = 4
1c) 0.072/4 = 0.018
1d) n = 4x8 = 24
1e) A= P(1+r)^n
1f) A = P(1+0.072/4)^4x8 = A = P(1+0.018)^32
1g) 5000(1+0.018)^32 = 8849.10 ( rounded 2 dp)
1h) 8849.10 - 5000 = 3849.10 (rounded 2 dp)

1d) 4 x 8 = 32 lol

Guest:

1a) 0.072
1b) 12/3 = 4
1c) 0.072/4 = 0.018
1d) n = 4x8 = 32 lol
1e) A= P(1+r)^n
1f) A = P(1+0.072/4)^(4x8) => A = P(1+0.018)^32 => A = P * 1.018³²
1g) 5000(1+0.018)^32 = $8849.10 ( rounded 2 dp)
1h) 8849.10 - 5000 = $3849.10 (rounded 2 dp)

for 1f you could have just put the simplified values in for r and n but if you put the working in as well you MUST remember the brackets.

EXCELLENT AGAIN.

Next question. I haven't split it up this time but you should.
Philip inherited $170,000. He invested it in a term deposit which earned 6.6% p.a. compounding every 4 months
How much did it grow to after 5 years?
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If you can do this one maybe you could tell me how much it would grow to after 6 and 1/3 years.

1a) 170000(1+0.066/3)^(3x5)
= $235620 (rounded to whole number)

1b) 170000(1+0.066/2)^(2x5)
= $235208

1c) 170000(1+ 0.006/1) ^ (1x5)
= $234010

Random260:

1a) 170000(1+0.066/3)^(3x5)
= $235620 (rounded to whole number)

1b) 170000(1+0.066/2)^(2x5)
= $235208

1c) 170000(1+ 0.006/1) ^ (1x5)
= $234010

Your first answer is good. It would be excellent except that you have cut corners again.
I want the formula and what each of the letters equal and then the substitution and then the answer.
I want these even though I didn't expressly ask for them.
I also want you to think every time about why t and n are equal to whatever they are equal to.
If you understand it properly and you keep reminding yourself about the relevance of what your are doing then it won't be hard to remember. (It will be obvious)

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You had me really confused about b and c. You didn't interprete my question the way i had intended. (It doesn't matter)
You thought I meant 6 years and as a separate question, 1/3 of a year.
Ok lets go with that. Your answers are not correct.
Always think about the key number. That is, if the interest is expressed yearly, which it nearly always is, how many compounding periods are there in a year.
for both of these the annual interest rate is the same as part 'a' and it is still compounded ever 4 months. Only the time that the money stays in the account is different.
Try them again.
This time don't cut corners.
and think about every step!
YOU CAN DO THIS.
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[size=150]Before you even start tell me in words[/size]
what does the r in the formula represent?
and
what does the n in the formula represent?
---------------------------------------------------------------------------------
Maybe if you are really thinking hard you could even tell me what questions you actually did answer. But this might be too hard.

1b) 170000(1+0.066/2)^(2x6)
= 250987 (D**m found the mistake it was 5 it was meant to be 6

1c) 170000(1+ 0.066/1) ^ (1x4)) (tricky question I haven't been taught monthly so if it was monthly do you x 1/3 or x 4 months? I will guess 4 months)
= $219521

You did not answer my question as I asked you to.

Please answer my question.
Tell me in words.
What is n?
What is r?

r= 0.066/2
n= 2 x6

r= 0.066/1
n= 1x4

No !!

TELL ME IN WORDS

What does the r stand for in the compound interest equation
What does the n stand for in the compound interest equation.

I am not asking you for any numbers I want word descriptions of what r and n are!

r= is the rate it is compounded
n= the number of compounding interest. How many times it is compounded

Random260:

r= is the rate it is compounded (A better answer would be) r is the rate for each compounding period
n= the number of compounding interest. How many times it is compounded n= the number of compounding interest. How many times it is compounded

n= the number of compounding PERIODS. How many times it is compounded: n has got nothing to do with the amount of interest being charged.

Okay, that is much better, you answered the questions that I asked you to answer! I've just adjusted your answers a little
----------------------------------------------------------------------------------------------------------------------------------------------------------


DON'T answer a b and c again. My new questions are in blue.

(a) Philip inherited $170,000. He invested it in a term deposit which earned 6.6% p.a. compounding every 4 months
How much did it grow to after 5 years?
(b) If you can do this one maybe you could tell me how much it would grow to after 6 years
(c) How much will it grow after 1/3 years.
----------------------------------------------------------------------------------------------------
Answer for all three of the above questions seperately. Don't worry about anything else. Just answer these questions properly.

1.What is the annual rate of interest for a? b ? c?
2.how long is the compounding period. That is how often is the interest added. a? b? c?
3.for each of them, how many times per year is the interest added a? b ? c?
4.What is the interest rate for each compounding period a? b? c? (This is r)

So I have asked 4 questions and each question must have 3 answers.

You will get them right if you just THINK first.

I found out what I did wrong with previous question.:

1b) 170000(1+0.066/2)^(2x6)
= 250987 (D**m found the mistake it was 5 it was meant to be 6

1c) 170000(1+ 0.066/1) ^ (1x4)) (tricky question I haven't been taught monthly so if it was monthly do you x 1/3 or x 4 months? I will guess 4 months)
= $219521


1b) 170000(1+0.066/3)^(2x6)
= 250987 (D**m found the mistake it was 5 it was meant to be 6

1c) 170000(1+ 0.066/3) ^ (1x4)) (tricky question I haven't been taught monthly so if it was monthly do you x 1/3 or x 4 months? I will guess 4 months)
= $219521

As you can see the rate is now changed to 3 since that is the compounding period. Please tell me if this is right or wrong.

but here is the question you asked

1a) 0.066
2a) (3x5) = 15
3a) 12/4 = 3
4a) 0.066/3 = 0.022

1b) 0.066
2b) (3x6) = 18
3b) 12/4 = 3
4b) 0.066/3

1c) 0.066
2c) (1/3x12) x 3
3c) 12/4 = 3
4c) r= 0.066/3

Tell me if the above is correct. I think it should be right now if it is we can now focus on terms and understanding sentence structure and meaning of each letter. Since idk if I got that right.

[quote="Random260"]

As you can see the rate is now changed to 3 since that is the compounding period. Please tell me if this is right or wrong.
It is not the rate that you have changed to 3, it is the number of times that interest is added each year that you have changed to 3
(and this is correct)
Your new attempt at entire answers is not correct.
I want to look at the answers that I actually asked for - Thank you for anwering them properly.
---------------------------------------------------------------------------------------------------

(a) Philip inherited $170,000. He invested it in a term deposit which earned 6.6% p.a. compounding every 4 months
How much did it grow to after 5 years?
(b) If you can do this one maybe you could tell me how much it would grow to after 6 years
(c) How much will it grow after 1/3 years.
----------------------------------------------------------------------------------------------------
Answer for all three of the above questions seperately. Don't worry about anything else. Just answer these questions properly.

1.What is the annual rate of interest for a? b ? c?
2.how long is the compounding period. That is how often is the interest added. a? b? c?
3.for each of them, how many times per year is the interest added a? b ? c?
4.What is the interest rate for each compounding period a? b? c? (This is r)


1a) 0.066
2a) (3x5) = 15
3a) 12/4 = 3
4a) 0.066/3 = 0.022

1b) 0.066
2b) (3x6) = 18
3b) 12/4 = 3
4b) 0.066/3

1c) 0.066
2c) (1/3x12) x 3
3c) 12/4 = 3
4c) r= 0.066/3
------------------------------------------------------------------------------------
Question 1, 3 and 4 are perfect, (except I want r= in front of 4a and 4b)
Q2 is not correct.
2.how long is the compounding period. That is how often is the interest added. a? b? c?
This is becauses you have a real problem interpreting words. You need to work on this.
The question is, [size=150]How often is the interest added?[/size]
See if you can work out what I want by yourself.
Add the r=s
re-submit this answer.

NOW, if you feel really confident that your Q2 is correct this time then I want you to try and write IN WORDS what you have discovered, what is the relevance of these answers,
why did I ask them? (You really need to practice writing and interpreting words)

for question 2 the interest is added every 3 months

hi Random,
You must be reading a different question from the one I am reading. do you want to try that again.

I was look at question 2 how often is the interest added. I don't understand it should be every 3 months it is added

This was the question.
(a) Philip inherited $170,000. He invested it in a term deposit which earned 6.6% p.a. compounding every 4 months
How much did it grow to after 5 years?
(b) If you can do this one maybe you could tell me how much it would grow to after 6 years
(c) How much will it grow after 1/3 years.
----------------------------------------------------------------------------------------------------
Answer for all three of the above questions seperately. Don't worry about anything else. Just answer these questions properly.

1.What is the annual rate of interest for a? b ? c? Your answers were all 6.6%
2.how long is the compounding period. That is how often is the interest added. a? b? c?
3.for each of them, how many times per year is the interest added a? b ? c? Your answers for all of them was 12/ 4 = 3 (There are 3 'nets' each holding 4 months in a year)
4.What is the interest rate for each compounding period a? b? c? (This is r) Your answer for all of them was r = 0.066 / 3 = 0.022
------------------------------------------------------------------------------------------------------------------
I can see where you may have got the number 3 from but 4 months is clearly written in the question!
------------------------------------------------------------------------------------------------------------------
I suspect that you are not trying your hardest anymore. Perhaps you are more interested in watching the number of posts and the number of views grow.
I don't actually mind this, I find it entertaining as well.
You could keep posting genuine questions and genuine answers (that you have thought about properly) for ever, and then site numbers would grow huge.
Then you would not only have the largest number of posts and views, but the numbers would be even cooler because the posts would be genuine.
-----------------------------------------------------------------------------------------------------------------
Now, pull your socks up, and please tell me why I asked these four questions, and what I wanted you to understand after you answered them.
------------------------------------------------------------------------------------------------------------------

1) You wanted to show me that I need to improve reading the questions
2) So this will help me understand more compound interest more.
3) To see the relationships between the question you gave me earlier and these

Yes okay Random. That was a fair answer. Not exactly what I had in mind but fair none the less.

The main thing that I wanted you to get out of those questions was that if you have money in a specific compounding account, it doesn't matter how long you leave your money there, the interest rate per compounding period ' r ' will stay the same.

I want you to copy this question and put the answers after each of my questions. So that the answers stay with the question.

John has some in an account
The interest rate is 4.32% per annum
Interest is compounded monthly.
a) ( think about how many 'nets' of interest there are in a year.) How many times each year is the interest compouned ?
b) What is the monthly rate of interest? This is the interest per compounding period, don't forget to put r= ?

If John leaves his money in the account for just 1 month then he has left it there for just 1 compounding period. so n=1
what will n be if [Note: Put n = every time ]
c) john leaves the money there for 2 months Ans: n=?
d) for 3 months Ans:
e) for 4 months Ans:
f) for 8 months Ans:
g) for 1 year Ans:
h) for 18 months Ans:
g) for 3 years Ans:

Please think about your answers and follow all my instructions.

a) ( think about how many 'nets' of interest there are in a year.) How many times each year is the interest compouned ? 12 times
b) What is the monthly rate of interest? This is the interest per compounding period, don't forget to put r= ? 0.0432/12

If John leaves his money in the account for just 1 month then he has left it there for just 1 compounding period. so n=1
what will n be if [Note: Put n = every time ]
c) john leaves the money there for 2 months Ans: n= 2
d) for 3 months Ans: n= 3
e) for 4 months Ans: n=4
f) for 8 months Ans: n= 8
g) for 1 year Ans: n= 12
h) for 18 months Ans: n= 18
g) for 3 years Ans: n= 36

The reason why I did that was he compounded 1 monthly for each month so 3 months will = 3. Going on holidays in 2 days xD then when I come back I should be ready to start school and be ready for compound interest as I skip the first week of school...

So I assume that means that in a day or 2 you will stop answering questions for a few weeks but you intend to start up again when you get back.
Is that right? You might have a hard time finding this post. If you are a formal member it will be easy. It would just be under your posts. But I have a feeling that you haven't formally joined up so it might be harder. (just remember the date of your last post, that should make it easier.)
Thanks for letting me know. Have a great holiday. Do you live in Western Australia, Perth maybe?

That last question was brilliantly answered.

I'll give you another on like that:
--------------------------------------------------------------------------
I want you to copy this question and put the answers after each of my questions. So that the answers stay with the question.

Toni has some in an account
The interest rate is 6.8% per annum
Interest is compounded every 2 months
a) ( think about how many 'nets' of interest there are in a year.) How many times each year is the interest compouned ?
b) What is the 2monthly rate of interest? This is the interest per compounding period, don't forget to put r= ? You forgot the r= last time

If Toni leaves his money in the account for just 2 month then he has left it there for just 1 compounding period. so n=1
what will n be if [Note: Put n = every time ]
c) john leaves the money there for 4 months Ans: n=?
d) for 6 months Ans:
e) for 8 months Ans:
f) for 10 months Ans:
g) for 1 year Ans:
h) for 18 months Ans:
i) for 2 years Ans:
j) for 2 years and 2 months Ans:
g) for 3 years Ans:
(if you are starting to get confused by the big numbers, look back and see how we did it before - we used the number of compounding periods 'nets' in a year to help us.)
h) for 9 years Ans:
i) for 25 years Ans:
j) for 68 years Ans:
k) If Toni leaves his money in this account for 68 years and the bank doesn't change the account in any way, what will r be after 68 years? Please think
Please think about your answers and follow all my instructions.