Calculating Financial Problems with Mathematical Models

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question 1 of 3

If you invest P dollars into an account offering r% (in decimal form) simple interest for t years, what mathematical model would you use to figure out the amount of money in the account after those t year?

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1. If you invest P dollars into an account offering r% (in decimal form) interest compounded n times per year for t years, which mathematical model can you use to find the amount of money in the account after those t years?

2. If you invest P dollars into an account offering r% (in decimal form) interest compounded continuously, which of the following mathematical models can you use to calculate the amount of money in the account after t years?

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About This Quiz & Worksheet

The quiz and worksheet are useful resources for checking your understanding of calculating financial problems using mathematical models. Different types of interest are addressed on the quiz.

Quiz & Worksheet Goals

Use this assessment to gauge your comprehension of:

  • Using simple interest
  • Calculating how much money you'll have when interest is compounded a certain number of times per year
  • Dealing with interest compounded continuously

Skills Practiced

If you use the quiz and worksheet, you can practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the lesson on mathematical models used in finance
  • Knowledge application - use your knowledge to answer questions about the different formulas used to calculate the amount of money earned over a certain number of years
  • Information recall - access the knowledge you have gained about working with interest that is compounded continuously

Additional Learning

The lesson called Calculating Financial Problems with Mathematical Models is helpful when you want to cover the following objectives:

  • Understand how to calculate which investment option is best for you
  • Define principal
  • Explore how compound interest works
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