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mac1147_lecture21_1_c

# mac1147_lecture21_1_c - L21 Applications of Exponential...

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241 L21 Applications of Exponential Function and Logarithms; Logistic Models Simple Interest Formula: If a principal of P dollars is invested for a period of t years at a per annum interest rate R , expressed as a decimal, the interest I earned is I P R t = The interest I is called the simple interest . Compound interest is the interest paid on the principal and previously earned interest. Compound Interest Formula : The amount A after t years due to a principal P invested at an annual interest rate r compounded n times per year is 1 nt r A P n = + 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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