Concept explainers
a.
To solve.
a.
Answer to Problem 21P
Explanation of Solution
Given information:
One million dollars is invested at 6.4% interest compounded quaterly,
We shall use the formula for compound interest.
Where A is the amount and P is principal and ris rate compounded n times.
Worth after 1 year is,
b.
To solve.
b.
Answer to Problem 21P
Explanation of Solution
Given information:
One million dollars is invested at 6.4% interest compounded daily.
We shall use the formula for compound interest.
Where A is the amount and P is principal and ris rate compounded n times.
Worth after 1 year is,
c.
To solve.
c.
Answer to Problem 21P
Explanation of Solution
Given information:
One million dollars is invested at 6.4% interest compounded hourly.
We shall use the formula for compound interest.
Where A is the amount and P is principal and ris rate compounded n times.
Worth after 1 year is,
d.
To determine the values we got above are close or not and why.
d.
Explanation of Solution
The values are very close as compared to the amount invested.
When the same amount is invested on same interest but compounded differently than there is no major difference in the interest. However as the rate increases, the amount will increase for same interest but compounded differently.
Here rate is 6.4% hence there is no major difference in the final amount.
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Algebra and Trigonometry: Structure and Method, Book 2
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