Math 1 · Unit 8 · Lesson 2 · part 4 of 5
Reading an expression, and moving P and r
Now read an expression somebody else wrote.
Reading an expression, and moving P and r
Now read an expression somebody else wrote. A savings account is described by
10,000(1.055)n
- 1The number in front is P.10,000 is the first deposit, the principal: the balance when n = 0, because 1.0550 = 1.
- 2The number in the parentheses is the growth factor.Read 1.055 as one quantity and split it: 1.055 = 1 + 0.055. The 1 keeps all of the money; the 0.055 is a 5.5% yearly rate.
- 3The exponent counts the years.n is how many times the account has been multiplied by 1.055.
Can n be 0? Can the balance ever be 0? n can be 0: that is the day the money goes in, and the balance is $10,000. The balance can never be 0: you are multiplying a positive amount by 1.055 over and over, and a positive number times a positive number is never 0. (Unit 7, Lesson 4: the curve never touches the x-axis.)
Move P and r yourself. The rate slider changes the growth factor, because the factor is 1 + r.