{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Asmincreaseswithoutbound 11mmapproachese

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: o that he’ll have $4000 at the end of two years? A = P(1 + r/n)nt let m = n/r, then A = P(1 + 1/m)mrt = P[(1 + 1/m)m]rt look familiar? As n, the number of times per year that interest is compounded, increases without bound m increases without bound. as m increases without bound (1 + 1/m)m approaches e Compound interest formula (compounded continuously) A = Pe rt 4) Ex: A total of $12,000 is invested at an annual percentage rate of 9%. Find the balance after 5 years if the interest is compounded continuously. 5) A sum of $9000 is invested at an annual percentage rate of 8.5%. Find the balance in the account after 3 years if a) interest is compounded annually b) inte...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online