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## 9.6 Chapter summary (EMA6W)

• There are two types of interest rates:

 Simple interest Compound interest $$A=P\left(1+in\right)$$ $$A=P{\left(1+i\right)}^{n}$$

Where:

\begin{align*} A& = \text{ accumulated amount} \\ P& = \text{ principal amount} \\ i & = \text{ interest written as decimal} \\ n & = \text{ number of years} \end{align*}
• Hire purchase loan repayments are calculated using the simple interest formula on the cash price minus the deposit. Monthly repayments are calculated by dividing the accumulated amount by the number of months for the repayment.

• Population growth and inflation are calculated using the compound interest formula.

• Foreign exchange rate is the price of one currency in terms of another.