Womack Report

February 23, 2007

Finite Math, February 23

Filed under: Math,Notes,School — Phillip Womack @ 10:01 am

No tests getting handed back today. Starting chapter 5, apparently. Something about finances.Working with percents: n/100 is (amount)/(base)

Interest — Money paid for use of money

Principal — total amount of money borrowed

Rate of Interest — the amount charged for the use of the principal for a given period of time

Simple Interest is interest computed on the principal for the entire period in which it is borrowed. I = Prt, or Interest equals Principal times rate times time.

Amount due equals Interest plus Principal.

A discounted loan is one in which the interest is precalculated.  It works like buying an item with the sales tax already factored in.  The actual money one receives will be the amount of the discounted loan minus the interest due.  For instance, a person who takes on a loan for $250 for a year at 10% interest would owe $275 at the end of that year.  If that person wanted the same results with a discounted loan, the initial loan amount would be $275, but the person would only receive $250 upon signing the note.

Compound interest is interest earned on both the original principal and accumulated interest.  Essentially, the interest is added to the principal at some interval, after which point future interest is earned on the new principal sum.

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