'Continuous compounding' presentation slideshows

Chapter 3 - The Time Value of Money

Chapter 3 - The Time Value of Money. The Time Value of Money. Compounding and Discounting Single Sums. Today. Future. We know that receiving $1 today is worth more than $1 in the future. This is due to opportunity costs .

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Summary of Last Lecture:

Summary of Last Lecture:. Main Concepts of FM. Time Value of Money Interest Theory and its determinants Yield curve theory and its dynamics. Nominal or upward sloping yield curve:.

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10.5: Base e and Natural Logarithms

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5.3 Applications of Exponential Functions

5.3 Applications of Exponential Functions. Objective: Create and use exponential models for a variety of exponential growth and decay application problems. Compound Interest.

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CTC 475 Review

CTC 475 Review. Interest/equity breakdown What to do when interest rates change Nominal interest rates Converting nominal interest rates to regular interest rates Converting nominal interest rates to effective interest rates. CTC 475. Changing interest rates to match cash flow intervals.

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Applications of Exponential Functions

Applications of Exponential Functions. Objective: Create and use exponential models for a variety of exponential growth and decay application problems. Compound Interest.

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Activity 7.3

Activity 7.3. Continuous Compounding By Mr. Flannery. Compounding to the limit. The compounding formula from 7.2 Where A is the amount in year t, after n compounding periods and A 0 is the initial deposit

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5.2 exponential functions

5.2 exponential functions. Quiz. Fill in the blanks below: 2 x+y = __ * __. Exponential function. Standard form: f(x) = a x , where a>0, a ? 1. Example: f(x) = 2 x , f(x) = (1/3) x Compare g(x) = x 2 and f(x) = 2 x. properties. Graph f(x) = 2 x and g(x) = (1/2) x.

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5.2 exponential functions

5.2 exponential functions. Quiz. Fill in the blanks below: 2 x+y = __ * __. Exponential function. Standard form: f(x) = a x , where a>0, a ? 1. Example: f(x) = 2 x , f(x) = (1/3) x Compare g(x) = x 2 and f(x) = 2 x. properties. Graph f(x) = 2 x and g(x) = (1/2) x.

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5-Minute Check on Activity 5-6

5-Minute Check on Activity 5-6. Identify the initial value, growth or decay factor, the rate of growth or decay and the domain and range in the following functions: y = (0.4)(1.26) x y = (0.9)(0.92) x y = (-1.82)(1.14) x. domain = {x | x ? Reals}. y(0) = 0.4. GF = 1.26. rate = 0.25.

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MAT 150 - Class #19

MAT 150 - Class #19. Review Solving Exponential and Logarithmic Equations Exponential Functions & Investing. Solve the Logarithmic Equations. A Better Understanding of How Compound Interest Works. Equations for Future Value of an Investment. Annual Compounding P = invested

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Continuous Growth and the Number e

Continuous Growth and the Number e. Lesson 3.4. Compounding Multiple Times Per Year. Given the following formula for compounding P = initial investment r = yearly rate n = number of compounding periods t = number of years. Compounding Multiple Times Per Year.

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Applications of Exponential Function - Compound Interest

Applications of Exponential Function - Compound Interest. One of the applications of the exponential function is compound interest. The formula is given by:. t = time in years

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Applications Growth and Decay Math of Finance

Applications Growth and Decay Math of Finance. Lesson 2.6. Consider Radioactive Half Life. Exponential Growth/Decay. If Y 0 is the initial quantity present The amount present at time t is This is continuous growth/decay Contrast to periodic growth/decay

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Compound Interest

Compound Interest. Lesson 3.5. Agree or Disagree ?. A bank account that pays 12% per year yields the same results as a bank account that pays 1% every month and compounds interest. Nominal vs. Effective Rate. Nominal rate The stated yearly rate "12% compounded monthly" Effective rate

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Applications of Exponential & Log Functions

Applications of Exponential & Log Functions. Review of Formulas for Compound Interest: After t years, the balance A in an account with principal P and annual interest rate r (in decimal form) is given by the formulas: For n compoundings per year:

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Investment and Compound interest

Investment and Compound interest. a) If Tanisha has $ 100 to invest at 8% per annum compounded monthly, how long will it be before she has 150? b) If the compounding is continuous, how long will it be?.

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3.5 Exponential and Logarithmic Models

3.5 Exponential and Logarithmic Models. n compoundings per year Continuous Compounding. An investment is made in a trust fund at an annual percentage rate of 9.5%, compounded quarterly. How long will it take for the investment to double in value?. Divide by P. Take the ln of both sides.

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Investment and Compound interest

Investment and Compound interest. a) If Tanisha has $ 100 to invest at 8% per annum compounded monthly, how long will it be before she has 150? b) If the compounding is continuous, how long will it be?.

143 views • 5 slides