Periods per year

Periods

In the last video, I hopefully showed you that if I borrowed P dollars, and I borrow it for a year, and you were to charge me an interest rate of r, or you could say 10r , then at the end and we were to compound continuously.

So these are kind of the important numbers in the home buying scenario.

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At the end of 10 years, I owe 500.

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So t is equal to three years.

But that's only important in the early universe, so it's generally neglected in this computation.

we start dealing with the idea of variables.

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So if you're getting 5 a year, that's going to be equal to let's do it on the calculator.

That equals my final payment or how much I owe once all the interest and the principal has compounded.

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166 effective interest rate.

All right.

So now, in this situation. we are compounding the interest.

Day counting basis

Compounded for 64 years.

You might have noticed that up here on the right, I made a very simple chart to try and explain how Fibonacci behaves to myself.

And whatever the down payment percentage is, it'll calculate it.

They'd collected information with photos. They'd manually build each building.

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So at least it makes sense in rough numbers.

No request from the Internet actually ever touched these precompute machines.

A lot of people, you know, when you hear 10 interest rate or even a 25 interest rate, that no one really makes a big deal about it.

No.

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Let's say this is what we assume is how many cupcakes we sell.

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And we haven't covered this yet,

And then we apply all these other principles

He is expert at figures.

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And then the amount that you owe me after one compounding period is 1 times the principal, plus my annual interest rate so in this case it's r divided by the number of times I'm compounding.

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She didn't factor the high cost of repairs into the budget.

It's always good to look at the data and guess it in advance, because then you can see if your math is actually correct.

When I compounded it 10 for 10 years using compound interest, I owe 259.

So some of the cash will go to the debt holders as interest.

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Cannot calculate the factor on 0.

Cannot calculate the lcm of 0.