Sharp QS2770H QS-1760H, QS-2760H, QS-2770H Operation Manual - Page 50

Compound Interest, Qs-2760h/2770h, Operation, Display, Print - calculator qs 2770h

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COMPOUND INTEREST Calculate the new balance on a deposit which is compounded quarterly for 4 years at a given annual interest rate. SOLUTION: 1. Calculate the quarterly interest rate. 2. Calculate the new balance (principal plus interest). FORMULA: New balance = P (1 + i) n Where P = amount of deposit (principal) i = interest rate per period n = number of years × 4 EXAMPLE: If P = $6,150 i = 5% annum ÷ 4 periods = 0.0125 n = 16 (4 years × 4) Then 6,150 (1.0125)16 .=. $7,502.32 (New Balance) (QS-2760H/2770H): OPERATION DISPLAY PRINT .05 0.05 0.05 ÷ Annual int. rate 4 4. = 0.0125 Quarterly int. rate 0.0125 0.0125 0.0125 + 1 1.0125 1. + 1.0125 ◊ (1 + i) 6150 1.0125 1.02515625 1.02515625 1.05094533691 1.05094533691 1.10448610117 1.10448610117 1.21988954767 1.21988954767 7,502.32071817 1.0125 × 1.0125 = 1.02515625 (1 + i)2 1.02515625 × 1.02515625 = 1.05094533691 (1 + i)4 1.05094533691 × 1.05094533691 = 1.10448610117 (1 + i)8 1.10448610117 × 1.10448610117 = 1.21988954767 (1 + i)16 1.21988954767 × 6,150. = Principal 7,502.32071817 New Balance - 48 -

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– 48 –
COMPOUND INTEREST
Calculate the new balance on a deposit which is compounded quarterly for 4 years at a
given annual interest rate.
SOLUTION:
1.
Calculate the quarterly interest rate.
2.
Calculate the new balance (principal plus interest).
FORMULA:
New balance = P (1
+
i)
n
Where
P
=
amount of deposit (principal)
i
=
interest rate per period
n
=
number of years
×
4
EXAMPLE:
If
P
=
$6,150
i
=
5% annum
÷
4 periods = 0.0125
n
=
16 (4 years
×
4)
Then
6,150 (1.0125)
16
.
=. $7,502.32
(New Balance)
(QS-2760H/2770H):
OPERATION
DISPLAY
PRINT
.05
0.05
0
.
05
÷
Annual int. rate
4
4
.
=
0
.
0125
Quarterly int. rate
0.0125
0.0125
0
.
0125
+
1
1.0125
1
.
+
1
.
0125
◊
(1
+
i)
1.0125
1
.
0125
×
1
.
0125
=
1
.
02515625
(1
+
i)
2
1.02515625
1.02515625
1
.
02515625
×
1
.
02515625
=
1
.
05094533691
(1
+
i)
4
1.05094533691
1.05094533691
1
.
05094533691
×
1
.
05094533691
=
1
.
10448610117
(1
+
i)
8
1.10448610117
1.10448610117
1
.
10448610117
×
1
.
10448610117
=
1
.
21988954767
(1
+
i)
16
1.21988954767
1.21988954767
1
.
21988954767
×
6150
6
,
150
.
=
Principal
7
,
502
.
32071817
New Balance
7,502.32071817