This week concepts were of function problems which may include exponentials and logarithms within the functions. With these types of function we can find out information for breaking-even and profit analysis, compound interest, continuous compound interest and doubling time for an investment. Out of these concepts from this week lesson plan, currently understanding and using doubling time for an investment would be the most important.
In this world we live in today, the economy has taken a huge down turn due to major banks making their own share of poor investments. With this down turn in the global economy, many people had their Saving Accounts, 401Ks, and Pensions nearly wiped out. All these may be different types of investments we use to help pay for retirement, but they are essential to being able to retire at an early enough age. Otherwise a person would only have to look forward to working during their own golden years instead of taking it easy.With the concept of doubling time for an investment, we can with some calculation figure out how long it would take for a certain sum of money, known as the principal, would take to double its value in a certain given time period at a certain given fix interest rate all at a certain interval. This is done with the equation A=P( 1+r/m)^mt.
With this equation, to figure out t which is time for the principal to double, we can sub in 2P for A since the other known value are r the interest rate and m equals 1.Once we solve the equation for t we find the amount of time needed to double the investment made. With the concept of this function, doubling time for an investment in use, a person can now safely and accurately predict the amount of time for growth in their investments. Within this global economic down turn, knowing and planning a financially secure future has become important for anyone in the general society.
If more people were able to use this concept of doubling time for an investment, the financial crisis would not be a crisis .