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Lesson 2

1. Lesson 2

1.5. Explore

Mathematics 20-1 Module 1

Module 1: Sequences and Series

 

Explore

 

This is a cartoon showing a woman sitting across from a banker. The caption reads: “I can offer you simple interest, but I’ll have to keep your fees highly complex.”

© 2011 Jupiterimages Corporation

When you invest, your money is in turn invested by the bank or investment company. In other words, your money is used to earn money. As a result, you are entitled to a portion of the increase. The portion that you receive is called interest.

 

The interest you receive is often a percentage of the amount you invest. The more money you invest, the more interest you earn. Simple interest is earned when you earn interest as a percentage of the original investment year after year. If you invest $800 and earn 5% per year, how much simple interest can you expect to receive each year?

 

In Try This 1 you will see how earning simple interest can be viewed as an example of both an arithmetic sequence and a linear function. You will also investigate how arithmetic sequences are related to linear functions.


glossary

You already saved Module 1 Glossary Terms in your course folder. In this lesson you will define these terms, and maybe others, in your copy of Module 1 Glossary Terms:

  • linear function
  • simple interest
Try This 1

 

This is a photo of an open bank vault.

Digital Vision/Thinktock

 

Imagine that you are investing $1000 in a savings bond that pays 4% simple interest at the end of every year.

  1. Calculate the simple interest you would earn each year. hint

     

  2. Complete a table like this one.

     

    Year

    		 1 2 3 4 5 6

    Total Value of Investment ($) at End of Each Year

    		 1040 1080 hint      


  3. Graph the year versus the value of the investment.

  4. Use the graph to find the total value of the investment after 10 years.

  5. After how many years will the total value of the investment be equal to $1480?

course folder Save a copy of your answers in your course folder.

 

Share 1

 

Discuss your results with a classmate or in a group. In your discussion, address the following points:

  • How does this situation represent an arithmetic sequence? How does the situation represent a linear function?

  • Is the graph more accurately represented with or without a line drawn through the points? Give reasons to support your answer.

course folder If required by your teacher, save notes from your discussion in your course folder.

I = 1000 × 0.04


1120