Calculate the return (A) if the bank compounds quarterly (n = 4). Round your answer to the hundredth's place.
Calculate the return (A) if the bank compounds monthly (n = 12). Round your answer to the hundredth's place.
Calculate the return (A) if the bank compounds daily (n = 365). Round your answer to the hundredth's place.
What observation can you make about the size of the increase in your return as your compounding increases more frequently?
If a bank compounds continuously, then the formula takes a simpler, that is
where e is a constant and equals approximately 2.7183.
Calculate A with continuous compounding. Round your answer to the hundredth's place.
2006-07-03 12:20:22 · 4 answers · asked by brownsugar20006 1 in Science & Mathematics ➔ Mathematics
I saw this before. Are you the same person?
anyhoo, formula is P*(1+r/n)^(tn)
and it converges to P*e^(rt) as you increase n
in your case, r=10%, t=1, A and n as in the task and "^" means power of (exponentiation)
Edit - corrected the formula as jjjones42003 suggested
2006-07-03 12:21:47 · answer #1 · answered by Anonymous · 0⤊ 1⤋
The formula that intel night gave is incorrect. To calculate compound interest the formula is A = P*(1+r/n)^(nt) where A is the amount with interest, P is the principle investment, n is the number of times it's compounded per year and t is the amount of time in years. In some cases you have to solve for t which requires the use of logarithms. For continuous compounding, the formula is A = Pe^(rt).
2006-07-03 13:00:13 · answer #2 · answered by jjjones42003 5 · 0⤊ 0⤋
what's the question? P is the initial vital ($10,000), 4 values of n are given, t is time (2 years). Use your calculator with each and every value of n and look at were given the solutions you pick. you pick a medical or graphing calculator.
2016-11-05 21:37:14 · answer #3 · answered by Anonymous · 0⤊ 0⤋
paycheck-taxes-daily expenses+interest from the bank= jack $h!t
2006-07-03 12:26:46 · answer #4 · answered by Anonymous · 0⤊ 0⤋