3) The formula for calculating the amount of money returned for an initial deposit money into a bank account or CD (Certificate of Deposit) is given by
A=P(1+r/n)
A is the amount of returned.
P is the principal amount initially deposited.
r is the annual interest rate (expressed as a decimal).
n is the compound period.
t is the number of years.
Carry all calculations to 6 decimals on all assignments then round the answer to the nearest cent.
Suppose you deposit $10,000 for 2 years at a rate of 10%.
g) Now suppose, instead of knowing t, we know that the bank returned to us $15,000 with the bank compounding continuously. Using natural logarithms, find how long we left the money in the bank (find t).
h) A commonly asked question is, “How long will it take to double my money?” At 10% interest rate and continuous compounding, what is the answer? Round your answer to the hundredth's place.
2007-05-16 10:15:57 · 1 answers · asked by Anonymous in Science & Mathematics ➔ Mathematics
15,000 = 10,000 e^0,1t
so
ln1.5 =0.1*t so t= 4.05 years
h) 2 = e^0.1t so t = ln2/0.1=6.93 years
The formula for compounding continously is
A = P e^rt
2007-05-16 11:27:51 · answer #1 · answered by santmann2002 7 · 0⤊ 0⤋