HP 10bII - Compound Interest

48 4: Picturing Financial Problems
Compound Interest
$FRPSRXQGLQWHUHVWFRQWUDFWLVOLNHDVHULHVRIVLPSOHLQWHUHVWFRQWUDFWV
WKDWDUHFRQQHFWHG7KHOHQJWKRIHDFKVLPSOHLQWHUHVWFRQWUDFWLVHTXDOWR
RQHFRPSRXQGLQJSHULRG$WWKHHQGRIHDFKSHULRGWKHLQWHUHVWHDUQHG
RQHDFKVLPSOHLQWHUHVWFRQWUDFWLVDGGHGWRWKHSULQFLSDO)RUH[DPSOHLI
\RXGHSRVLWLQDVDYLQJVDFFRXQWWKDWSD\VDQQXDOLQWHUHVW
FRPSRXQGHGPRQWKO\\RXUHDUQLQJVIRUWKHILUVWPRQWKORRNOLNHD
VLPSOHLQWHUHVWFRQWUDFWZULWWHQIRUPRQWKDWó¸$WWKH
HQGRIWKHILUVWPRQWKWKHEDODQFHRIWKHDFFRXQWLVLVó
RI
7KHVHFRQGPRQWKWKHVDPHSURFHVVWDNHVSODFHRQWKHQHZEDODQFHRI
7KHDPRXQWRILQWHUHVWSDLGDWWKHHQGRIWKHVHFRQGPRQWKLV
óRIRU7KHFRPSRXQGLQJSURFHVVFRQWLQXHVIRUWKH
WKLUGIRXUWKDQGILIWKPRQWKV7KHLQWHUPHGLDWHUHVXOWVLQWKLV
LOOXVWUDWLRQDUHURXQGHGWRGROODUVDQGFHQWV
7KHZRUGFRPSRXQGLQFRPSRXQGLQWHUHVWFRPHVIURPWKHLGHDWKDW
LQWHUHVWSUHYLRXVO\HDUQHGRURZHGLVDGGHGWRWKHSULQFLSDO7KXVLWFDQ
HDUQPRUHLQWHUHVW7KHILQDQFLDOFDOFXODWLRQFDSDELOLWLHVRIWKH+3%,,
DUHEDVHGRQFRPSRXQGLQWHUHVW
1
-1,000.00
1,005.00
2
-1,005.00
1,010.03
3
-1,010.03
1,015.08
4
-1,015.08
1,020.16
5
-1,020.16
1,025.26
10B.book Page 48 Wednesday, June 21, 2000 5:19 PM