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Boss lesson · The Mortgage Final
Exam-hall rules — pencil, paper, and 6%
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Exam-hall rules — pencil, paper, and 6%

This is the boss. No calculator. Every rate on this page is 6%, every number is chosen to fit in your head, and every answer feeds the next: the flat benchmark, then the compounding account, then the gap between them, then the savings plan, then the doubling check. Write each line down — one early slip rolls all the way to the verdict.

Three nuggets you will need. First, 6% compounded semi-annually is 3% twice: multiply by 1.03, then by 1.03 again, and 1.032=1.06091.03^2 = 1.0609 — so a year of it pays 6.09%, not 6%. Second, two end-of-year deposits at 6% grow by a factor of exactly 2.062.06, because the first deposit earns one year and the second earns nothing. Third, 72/6=1272 / 6 = 12: at this rate, money doubles in twelve years.

The household is asking a real question, and the last line is where you answer it. 5★ under par here is the chapter crown. Clock in.

PrIt

I=P r tI = P \, r \, t

  • II= Interest earned
  • PP= Principal
  • rr= Interest rate per period (decimal)
  • tt= Number of periods
Simple Interest solver →
PArnt

A=P(1+rn)ntA = P \left( 1 + \frac{r}{n} \right)^{n t}

  • AA= Final amount
  • PP= Principal
  • rr= Interest rate per period (decimal)
  • nn= Compounds per period
  • tt= Number of periods
Compound Interest (Periodic) solver →
FVDin

FV=D (1+i)n−1i\mathit{FV} = D\,\frac{(1+i)^n - 1}{i}

  • FV\mathit{FV}= Future value (money)
  • DD= Deposit each period (money)
  • ii= Interest rate per period
  • nn= Number of deposits
Future Value of an Annuity (Regular Deposits) solver →
in

n≈0.72in \approx \frac{0.72}{i}

  • nn= Periods to double
  • ii= Rate per period
Rule of 72 (Doubling Time) solver →
no calculator in the boss room — the numbers are chosen to fit in your head