How Do I Sign New Mexico Banking Word

How do i industry sign banking new mexico word simple

your formula chart cuz you need your formula chart we have additional information by the way a lot of you sucked at Pythagorean theorem I want to say hey that'll be a topic that we shouldn't have to go over but we will be going over all right so is that one y'all did really well on the assessment hey and then we gave it to you and y'all forgot maybe it was just the way they asked the questions is that the problem maybe I don't know but simple interest compound interest if you notice they're two different formulas simple interest is basically used like when you take a car loan or a student loan most savings accounts are simple interest compound interest is a more complicated formula and it's used for more of in banking in accounts there are certain types of like IRAs and and different types of interest that you can make and compound interest you never want to take a loan with the compound interest because it compounds daily you could be in big trouble alright wait hopefully you would be in big trouble because that means it's just every day okay so you want that interest rate to be simple you want it in simple interest if you ever have to borrow any money a home loan is simple interest rate it may come out to be a lot of money because you're borrowing a lot of me but it is so we are using the simple interest formula today tomorrow we're going to compound and interest is the amount of money charged or borrowing or using money let's say that's an easy way to say borrowing money but if you and examples of that are car loan house loan savings accounts most simple savings accounts give you simple interest student loan so you're not necessarily always paying the interest if it's a savings account the bank is paying you interest to use your money because they do you put a hundred dollars in the in a savings account they take there are a hundred thousand customers and and take all of their savings accounts and they're out there investing that's how they can afford to give a home loan because when they give a home loan the bank has to have the money to loan for that because they got to pay whoever it is that owns the home so your money is being used in your bank patient interest to use your money if it's in their bank but it's not very much savings accounts pay very very little interest it's not very much at all okay so your formula is I equals prt okay and we need to know the different parts of this in eyes so when you solve this formula you're solving for the amount of interest in other words if you borrow a hundred dollars you're gonna pay a certain amount above and beyond that hundred dollars in order to borrow it that is what interest is hey so I is your interest how much it's gonna cost you to borrow that money you buy a twenty five thousand dollar car you're probably gonna pay about if you're lucky you'll get away with paying about thirty thousand dollars for that in the end okay I want I went to go get a car loan this is back when I was younger didn't they wanted me to pay on a $23,000 wanted me to end up paying $32,000 in the end because they only talk about how much you'll pay for month they don't want you to say no how much is my interest rate how much am i boy to be paying and you sit there with the calculator figuring it out and you say Oh Lord I'm not paying me $32,000 for a $23,000 car okay so you you know that's just the way car dealers are they're gonna ask you well how much can you afford a month that's the first thing out of their mouth always not not I'm not talking about how to check in a Ford a month how are you gonna sell me this car for Bank bottom line how much you gonna sell me this car for and they give you a price and you say okay what's my interest rate and then you figure it out for yourself right all right he is principle principle is the amount of money that you're buying it's also known borrowing it's also known as the initial amount it is the amount of money you are borrowing okay that can be a simple house around here two hundred and fifty thousand dollars you gotta figure you're gonna pay to borrow two hundred fifty thousand dollars you're gonna have to pay somebody's nothing to use their money for 30 years right there's no take you 30 years to pay that 250 thousand dollars back okay you live here and you buy a house it's all really hard most places if you buy a house you get to get some equity and he can turn and sell it for instance principle on my first home I bought in California was a hundred and fifty thousand dollars okay ten years later the principle or the money I sold that house for was four hundred and ninety nine thousand so I made equity you take four hundred five hundred thousand I made three hundred and fifty thousand dollars in principle hey you can't do that here in Memphis you can't do that in California too much anymore but you can make some equity in Senator Texas you just because and why I say that is because there's not people this is not a mover and shaker people move in here and they're like where you don't have a lot of property available because you have so many people trying to move here okay that's what drives the home prices up all right we're a center what kind of yeah we don't have big industries to bring people here that kind of thing where you do when you live closer to urban area all right great this is your rate it's always named christen okay they always give it to you in a percent you must convert the rate percent to a decimal okay do we remember there's two ways one way is you use Dr Pepper do you remember that when it's a percent you move it two times to the left if it's a percent you're gonna move your decimal point one two times okay two times to the left the other way is whatever your percent is you take that and you have to take the % away regardless you take your rate and you divide it by 100 okay those are the two ways you can change and manipulate a percent into a decimal now the thing you have to be careful about is sometimes you're given something like [Music] 4.25 percent as a rate if you're given 4.25 percent if I just write it as 4.25 that is not a decimal I still I take drop the dust the % and then I still have to either divide by a hundred or move this one two times to the left and I end up this would equal point zero four two five that would be my decimal okay sometimes I think it's just easier to remember divided by 100 it's just so easy the last thing we need to know is the T in this formula so it's I equals P times R times T when you have letters next to each other in a formula means you're multiplying those letters all right so T is time and that time must be always in years when you are calculating interests all right now sometimes you'll pay interest for six months so you have to convert that those months into into years and the way you do that is you take the number of months how many months are there in a year and divide it by twelve every time okay so if you need to know or you could also because you have a calculator that does it very easily you let's say I had six months right I could I there's two ways I can convert that to years I can do 6 divided by 12 right and I would get point 5 in your calculator or you could simply use it as this and put parentheses around it when you're multiplying and do six times you would do time six well hey that would be your teeth it's up to you how you want to do that but you have to do it hey all right so let's try converting 18 months is equal to how many years well 18 divided by 12 is what 1.5 doesn't it hey Victor what's 3 months and years 25 so that is the number use anybody do the next one yet okay so you would take 60 divided by 12 and that would equal 5 years all right so we've talked about this formula it says equals I so when you do this formula you are actually solving for the amount of interest you're going to have to pay to borrow that money for at this rate and this amount of time but sometimes they want to know what is the total repay okay how much is it gonna cost you total total balance okay or sometimes they call that ending balance okay so what will be the ending balance on the loan hey that is how much you're gonna have to total the total amount you're gonna have to repay and to do that first find the interest hey next you are going to add interest which is your I plus your principal which is your P and that will give you what we would call account balance or ending balance there's different ways that they'll say that if they do not indicate what type of interest it is it is simple interest in order for them to want you to use compound that formula it will they will state compound but it's not always stated simple when it's simple so if they don't tell you compound you need to automatically use simple let's turn page let's try prop a couple practice problems you get a student loan from New Mexico Education Assistance foundation to pay your educational expenses this year find the interest on the loan so they want to know interest on the loan borrowed you borrow alright so we've got P R Mt okay because we know our formulas I equals P times R times T hey so your principal is 2,000 your interest rate is 8% how am I gonna write that as a decimal point 0 8 you either move it twice or you divide by a hundred okay and it's for one year so that's my time it's in years so we're good to go so now it's just a matter of putting it to hon times point zero eight times one and what do I get when I do that everybody got it you should practice cuz if you practice one we're doing these problems then it'll just come and you won't have to think about it when you go to do your own ok if you sit there and just copy everybody's answer then that's when you get in trouble ok so we get that equals how much I believe it's a hundred and sixty dollars so I equals a hundred and sixty dollars everybody got 160 okay so remember we're looking for principal rate time our formula is I equals P times R times T okay so you borrow how much ten thousand leave those commas off I hate commas why do I hate commas cuz they they get confused four decimal points too many times from the bank at 4.8% so if I take four point eight drop the percent key I'm either gonna divide that by 100 or I'm gonna move that decimal point two times one two and some people get confused with that so sometimes it's just easier to move to divide by a hundred so you get point zero four eight and our time is five years so I've got $10,000 times point zero four eight times five years and that equals what so I equals 2400 remember I said earlier what would be the account balance to this loan what would you do you take your interest which is oh gosh I wrote 24,000 its 2,400 and you add it to the 10,000 so if you had to find out how much you have to repay that person for borrowing the 10,000 you would be repaying $12,400 hey all right you are tired at the end of your term and decide to borrow $500 to go on a trip to whatever Lam I like that you go to the bank and borrow the money at eleven percent for two years so I equals P times R times T what's my P $500 times what's my R 11 percent I have one or two ways I can do that xi divided by a hundred or move your decimal two times and you get what point one one though Jeff okay point one one times how many years two years what do I get 110 so I equals 110 so I'm gonna pay a hundred and ten dollars extra besides the 500 that I already borrowed okay how much will you have to pay the bank at the end of two years so now they want to know what how much in the end are you gonna have to do so you're gonna take your principal add it to your interest and you get account balance or how much the end in the end you're gonna have to pay back so you've got 500 you originally borrowed plus the hundred and ten you have to pay an interest so you're gonna pay six hundred and ten dollars back okay number four find the interest on a loan of twenty five hundred that is brought at 9% for seven months so I equals prt I've got let's see P is 2500 that's pretty straightforward I've got an R of nine percent so that's gonna come out to how much point zero nine and then time is seven months what am I gonna have to do with that seven months so 7 divided by 12 gives me what what point five eight so if I do this unless it's this question it's not gonna be open-ended but if I do this with point five eight I'm gonna get close enough to take out a multiple choice do you agree otherwise I would definitely do x quit point because he's around seven twelve okay because I want to make sure that I get the exact amount so point five eight and what am I gonna get one hundred and thirty dollars point five is really fifty cents right when we're talking money we want to ride it like money so then it says how much would it cost to repay the loan on for a so that's one of those principles plus interest equals account balance or count ending balance I guess is a better way to put it twenty-five hundred plus one hundred and thirty dollars and fifty cents gives me twenty-six hundred and thirty dollars and fifty cents do you have any questions okay so we're gonna do the practice like I said there's only ten problems