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Unformatted text preview: these? Well, unfortunately the answer is that it
depends. The larger the initial amount the more decimal places we will need to keep around. As
a general rule of thumb, set your calculator to the maximum number of decimal places it can
handle and take all of them until the final answer and then round at that point.
Let’s now look at a different kind of example with compounding interest. © 2007 Paul Dawkins 309 http://tutorial.math.lamar.edu/terms.aspx College Algebra Example 2 We are going to put $2500 into an account that earns interest at a rate of 12%. If we
want to have $4000 in the account when we close it how long should we keep the money in the
(a) we compound interest continuously. [Solution]
(b) we compound interest 6 times a year. [Solution]
Again, in let’s identify the quantities that won’t change with each part. A = 4000 P = 2500 r= 12
100 Notice that this time we’ve been given A and are asking to find t. This means that we are going to
have to solve an exponential...
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- Spring '12