I know that for the first year it's $1050
Well, the formula for this is Interest = Price * rate * time. So, I is what we need to find. So, I = (1,000) (0.05) (1) is 50. So, for year 1, it is 1,050. Using the same formula, can you figure out the rest?
$1100 for year two?
Yes. Good Job!
And then $1150
Yes. Just keep using that formula and you should get the rest.
wait but wouldn't this be it for simple interest? We are looking for compound?
Well, for compound interest, Amount = Principal * (1 + rate / number of times per year) ^time
You see because I have the values we are getting for the simple interest table, and it's saying I got those values correct. But what I'm trying to do is complete the second column which is titled compound interest values.
That's what I did before but it said my values were incorrect, Can I show you what I did?
Ok, so for the first year I did 1000(1+.05/1)^1
I got the fist value which is correct 1050
But for the remaining years here's what I did: 1000(1+.05/2)^2
But I'm assuming my substitution is wrong
Do you happen to see what I'm doing wrong?
are you sure you typed it in right?
Oh! Perhaps you did not do the order of operations. See, do the (1 + 0.05/2) first, then the ^2, and then the 1,000? When doing that I got, 1,050.625.
That's what I got too
It said my answers were wrong. Do you think it could be the rounding to the nearest cent?
I put in 1050.62
Perhaps so. Then it would be 1,050.625 = 1,050.63
That's what I had originally put but it said I'm wrong
Maybe I'll try emailing my instructor
Oh wait. you said you put in 1,050.62. When you round up its .63 not 2?
Ok and for the next years would these be correct then? $1050.84 $1050.94 $1051.10
They all came out to being wrong when I originally put them in
For year 3, I got 1,033.61...? Double checked it as well.
See if you get that.
I'm not getting that, I must be putting it in wrong
Are both year 4 & 5 wrong as well?
OH. DANGIT. SORRY that's me.
I forgot to change the exponent to 3. So, yes. 1,050.83 is correct =).
Do you mean for year three?
Because then wouldn't the values just be decreasing and then increasing?
From 1033.61 for year 2 to year 3
I guess thats what it is?
So do the rest of the values for year 4&5 seem correct?
um year 3 is 1,050.83, Year 4 is 1,050.94, and year 5 is 1,051.01. So yes.
it's still incorrect when I put it in, but thank you!
I'll email my instructor and figure it out
Your Welcome! Msg me if you need help again! =)