top of page
ANSWER:
Financial Function is usually used to express the changes in money such as calculating interest earned from the investment and finding the total amount of money you will be earning from compound interest. When you express this function algebraically, it has many in common with Arithmetic and Geometric Sequences/Series.
Interest is simply the money you get by investing money to certain place or it is the extra money that will be taken away. And there are two types of interst: Simple Interest and Compound Interest.
Simple Interest
is the interest earned or paid only on the original sum of the principal value.
P=Principal Value
Original money that was borrowed/invested
r=interest rate
Percentage of the money that was earned from an investment
t=time
Compound Interest
is the interest being added to the principal amount before new interest will be added; thus, the interest is already included in the original value for the next time you calculate and add the interest.
A=Future Value
Total amount after a certain period of time
P=Principal Value
Original money that was borrowed/invested
i=Interest rate/Compounding Period
Percentage of the money that was earned from an investment
n=Total number of Comounding Periods
What is Compounding Periods?
Compounding Periods are the intervals
at which interest is calculated.
・ANNUALLY・SEMI-ANNUALLY・QUARTERLY・MONTHLY・DAILY・
Anchor 1
bottom of page