241L21 Applications of Exponential Function and Logarithms; Logistic Models Simple Interest Formula:If a principal of Pdollars is invested for a period of tyears at a per annum interest rate R, expressed as a decimal, the interest Iearned is IP R t=⋅⋅The interest Iis called the simple interest. Compound interestis the interest paid on the principal and previously earned interest. Compound Interest Formula: The amount Aafter tyears due to a principal Pinvested at an annual interest rate rcompounded ntimes per year is 1ntrAPn⎛⎞=⋅+⎜⎟⎝⎠Note: The more frequently the interest rate is compounded (the larger n), the larger is the amount of A.Question: Is it true that A→ ∞, as n→ ∞?
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