Lecture 5B: Annually Compounded Interest

For MAT 143, Summer 2020, Fayetteville Technical Community College, from section 4B

Problem worked:
On July 18, 1461, King Edward IV of England borrowed the modern equivalent of $384 from New College of Oxford. The King soon paid back $160, but never repaid the remaining $224. The debt was forgotten for 535 years. Upon its rediscovery in 1996, a New College administrator wrote to the Queen of England asking for repayment, with interest. Assuming an interest rate of 4% per year, the administrator calculated that the college was owed $290 billion. How much would the bill have been for if the interest rate was only 2%?

Interest