{"id":1266,"date":"2021-05-20T12:45:32","date_gmt":"2021-05-20T16:45:32","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/businessmathematics\/?post_type=chapter&p=1266"},"modified":"2021-06-29T19:00:19","modified_gmt":"2021-06-29T23:00:19","slug":"videos-compound-interest","status":"web-only","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/businessmathematics\/chapter\/videos-compound-interest\/","title":{"raw":"Videos: Compound Interest","rendered":"Videos: Compound Interest"},"content":{"raw":"

What Is Compound Interest?<\/h1>\r\n[embed]https:\/\/youtu.be\/cU0e-u3G748[\/embed]\r\n

No really, what is compound interest?<\/h2>\r\n[embed]https:\/\/youtu.be\/S6lunN97MV0[\/embed]\r\n
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  1. Invest $100 for one year with a nominal rate of 24%. Fill in the table if you compound\u2026<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Compound\u2026<\/strong><\/td>\r\nm<\/em><\/strong><\/td>\r\nNominal\u00a0 (jm)<\/em><\/strong><\/td>\r\nPeriodic (i)<\/em><\/strong><\/td>\r\nPeriods (n<\/em>) in a year<\/strong><\/td>\r\nFV of $100 in 1 year.<\/strong><\/td>\r\n<\/tr>\r\n
    Annually<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Semi-annually<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Quarterly<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Monthly<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n[embed]https:\/\/youtu.be\/OrGMf4Qp2S4[\/embed]\r\n
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    1. You acquire $5,000 and deposit the money in a mutual fund that has an average return of 9% compounded annually. How much will you have when you retire in 25 years?<\/li>\r\n<\/ol>\r\n[embed]https:\/\/youtu.be\/1bKj9Xc9bE0[\/embed]\r\n
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      1. You deposit $10,000 at j4<\/em> = 12% for 54 months. How much money will you have?<\/li>\r\n<\/ol>\r\n[embed]https:\/\/youtu.be\/UYEcWJsW24A[\/embed]\r\n
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        1. You would like to save $20,000 so you can take a year off in 42 months. How much should you deposit today if money earns 4% compounded semi-annually?<\/li>\r\n<\/ol>\r\n[embed]https:\/\/youtu.be\/e0VPVjAFWLM[\/embed]\r\n
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          1. How much money do you need to invest to earn $1000 interest in 18 months if the interest rate is 8% compounded quarterly?<\/li>\r\n<\/ol>\r\n[embed]https:\/\/youtu.be\/b33P6YNx9uE[\/embed]\r\n
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            1. Macleans Magazine estimates that it will cost $130,000 for a four year university education when children born this year reach university in 18 years.<\/li>\r\n<\/ol>\r\n

              (a) You have $10,000 to invest today. What annual rate is required to reach $130,000?<\/p>\r\n

              (b) How much do you need to invest if you can only expect a rate of return of j2<\/em>=12%?<\/p>\r\n

              (c) You deposit $12,000 and invest in bonds that pay 6% compounded semi-annually. How old will your child be when they can start university?<\/p>\r\n[embed]https:\/\/youtu.be\/SQIoaWqbw1Q[\/embed]","rendered":"

              What Is Compound Interest?<\/h1>\n