Wednesday, April 30, 2008

Scribe Post

Today we studied about The Rule of 72. We can use this rule to calculate the "Interest Rate" and the "# of years to double" your amount of money. Here is the formula:
(Interest Rate) x (Years to double) = 72.
Because I can't find today's slide so I don't remember the question we did so clearly. It was like: You invest your money in 2 ways: $1200 a year or $100 a month with the interest rate 6% in 1 year. Compare those 2 ways. Here is my answer for this question:
a) $1200 a year:                                       b) $100 a month:
N=1                                                              N=12
I%=6                                                            I%=6
PV=0                                                           PV=0
PMT=-1200                                               PMT=-100
FV=alpha+solve = 1200                           FV=1233.556
P/Y=1                                                          P/Y=12
C/Y=1                                                          C/Y=12

If you invest your money $100 a month , you will gain extra:
$1233.556 - $1200 = $33.556

Next scribe is Ari5

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