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Question

For a fixed rate, a fixed principal amount, and a fixed compounding cycle, the return is an exponential function of time. Using the formula, , let r = 8%, P = 1, and n = 1 and give the coordinates (t,A) for the points where t = 0, 1, 2, 3, 4. Round your answer to the hundredth's place.

I need the coordinates, how its worked and the graph.

Thanks

Answer 1

Your equation is
Return = Principlex(1 + (r/n))^(nt)
here,
Using your abbreviations and values,
A = 1(1+(.08/1))^(1t) which simplifies to
A = (1.08)^t
If you use a graphics calculator you could put this in as
y = (1.08)^x and see what it looks like
for coordinates (t, A) you'd do
for t = 1, 2, 3, 4
A = (1.08)^t
1 = (1.08)^0
1.08 = (1.08)^1
1.1664 = (1.08)^2
1.259712 = (1.08)^3
1.3604880 = (1.08)^4
Now try it yourself, it's not that hard once you do it