my initial investment is $500 and the return rate is 2.41%

notes for formulas to use

Okay, now we are going to use the equations above to figure out what the total amount we'd have (including the initial investment) if we put in $5000 into each of these stocks for 5 years. Take the one year return as a consistent interest rate. Use the space here to figure it out for Stock 1: And so now we can see that if we just add these values up, we will get the total interest earned from this investment after however many years we'd like to specify. And even add that total to the initial investment, to figure out the total amount in the investment So now knowing we have a sequences and series application here, if we wanted to find a specific amount of interest added to the investment in a particular year after the initial investment was made, we can use the following equation: 1. =ir(1+r)^(-1) Where "I" is the interest obtained only in year 'n'; 'Y' is the interest rate as a decimal, I is the initial investment, and when multiplied by 'r' is the interest gained after the first year. This is the same equation you will see in this chapter, except we have the (1 + r), since our common ratio is in terms of the interest rate, which must be added to 1 first to make sure we are talking about an increasing sequence, not a decreasing one. We also have i'r as the initial value in our sequence. Now if we wanted to find the total amount of interest gained in a certain number of years, we can use this equation: S =- (1 - (1+r)") Where is the sum of n years of interest and all the other variables are the same as the above equation. Again, we see a very similar equation to what you will use in this chapter, only a few differences as we still have to have the (1 + r) as our common ratio. And because our initial term in the sequence is i*r, the denominator cancels out, and we're left with the above equation. Okay, now that we have some tricks up our sleeve, we can begin the next step in the project