1.£500 is deposited in a bank paying 2% compound interest per annum. What is the balance after 2 years?
1 answer:
Formula for compound interest: A = P( 1 + r/n)^nt
A = final amount
P = initial principal balance
r = interest rate
n = number of times interest applied per time period
t = number of time periods elapsed
^ = I used this symbol to present that a the number needs to go higher (see picture)
1. 500(1 + 2/100)^2 = 520.2
£520.20
2. 400(1 + 1.75/100)^2 = 414.12
£414.12
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First, lets break up the equation into pieces.
The first variable is slope, in your case here, we have a slope of -3 or -3/1.
The other variable is the y-intercept, which is where place on the graph where you plot (0,X), in your case here we got (0,-4). That is the y-intercept.
to graph it you have to plot the y-intercept, and then identify the slope.
Here is an example.
