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Compound Interest |
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Compound interest is a remarkable tool for planning for the future. If you open a savings account early in life and make regular contributions to your account, you will be amazed at how quickly your money grows. The sites listed on this page will help you to understand compound interest. |
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Internet Activity |
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Activity 10.5
Click this link to view your assignment for this activity.
http://go.hrw.com/resources/go_mt/e1/c10/ECOMPINT.PDF |
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Adobe Acrobat Reader
You will need Adobe Acrobat Reader to open and print the activity. To download the reader, click "Adobe Acrobat Reader" above.
http://www.adobe.com/products/acrobat/readstep.html |
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Exploration |
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Interest Tutorial
This site uses a Java applet (in a separate window) to display a graph showing how simple or compound interest can make your money grow. The site will also introduce you to the concept of continuously compounded interest. To obtain a graph:
Click on the Interest Simulation button to start the applet.
Choose the number of years for your graph by clicking on the arrow buttons.
Click on one of the color choices.
Choose the type of compounding by clicking on simp (simple interest), comp (compound interest), or cont (continuously compounded interest).
Choose the balance, which is the amount of the initial deposit.
Choose the interest rate as a percent.
If you chose compound interest, choose the number of intervals per year. For annual compounding, use one interval. For monthly compounding, use 12 intervals.
By using several colors in the graph, you can easily compare the results of different kinds of interest.
http://www.cs.utah.edu/~zachary/isp/applets/Interest/Interest.html |
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Understanding and Controlling Your Finances: Basic Compound Interest Calculator
What would happen if you invested a small amount of money every week, instead of just making a large deposit when you open your account? This site will tell you how much money you’ll have at the end of each year. (Note: This site’s calculations are based on continuous compounding of interest.)
http://www.bygpub.com/finance/InterestCalc.htm |
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