Deposit A pays 6% interest with the interest compounded annually. Deposit B pays 6% interest with the interest compounded quarterly. Clearly, Deposit B is a better option as it provides a higher return. Continuously Compounded Interest Formula Continuously compounded interest is the mathematical limit ...
Difficult: Medium Category: Passport to Advanced Math/ Exponents Strategic Advice: Even though this question is wordly, if you read carefully you'll see that you're given a formula and the values of all the variables except the one you're looking for
John deposited U$1 in his savings account today. Assuming the interest is compounded annually, what is the amount of time (in years) that John must wait before he has $16 in his savings account? a) t = 1 b) t = 2 c) t = 4 d) t = pi e) t = e...
Estimate the total future value of an initial investment or principal of a bank deposit and a compound interest rate. ➤ The interest can be compounded annually, semiannually, quarterly, monthly, or daily. Include additions (contributions) to the initi
Answer and Explanation:1 The formula for the future value using continuous compounding is: {eq}FV = PV \times e^{rt} {/eq} WhereFVis the future value,PVis the present...
These are included because they are "implied" variables required to go from the words in the problem to the formula. If the annual interest rate, r, is used instead of the period interest rate, i, for any compounding period other than annually you will overestimate the ...