Compound Interest
Chapter Outline
This chapter explores compound interest and is divided into two parts. Part one covers the financial calculator approach, while part two discusses algebraic formulas for calculations.
2.1 Instruction to Compound Interest: This section introduces the fundamental concept of compound interest and explains key terms like nominal interest rate, periodic interest rate, and compounding frequency.
Calculator Approach
2.2 Future Value – Calculator Approach: This section focuses on computing the future value of compound interest for loans or investments using a financial calculator.
2.3 Present Value – Calculator Approach: This section discusses computing the present value of compound interest for loans or investments using a financial calculator.
2.4 Interest Rate – Calculator Approach: This section explores how to calculate the nominal and periodic interest rates for compound interest using a financial calculator.
2.5 Number of Compounding Periods and Time – Calculator Approach: This section demonstrates the calculation of the number of compounding periods and the duration of the term for compound interest problems using a financial calculator.
Formula Approach
2.6 Future Value – Formula Approach: This section explains the process of calculating the future value of compound interest for loans or investments using mathematical formulas.
2.7 Present Value – Formula Approach: This section covers the calculation of the present value of compound interest for loans or investments using mathematical formulas.
2.8 Interest Rate – Formula Approach: This section discusses how to calculate the nominal and periodic interest rates of compound interest for loans or investments using mathematical formulas.
2.9 Number of Compounding Periods and Time – Formula Approach: This section details the calculation of the number of compounding periods and the term duration for compound interest problems using mathematical formulas.
