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Interest

suppose the deposit $20,000 for 5 yrs @ 8% rate what is the return annually (n = 1) and quarterly (n = 4).

Round both to the hundredth place.

c) Does compounding annually or quarterly yield more interest and explain

d) if a bank compounds continuously the the formula used is A=Pe^rt where e is a constant and equals approx. 2.7183. Calculate A with continuous compounding. Please show how

e) How long will it take to double the money @ a 8% interest rate and continuous compounding..please show how

Solution Summary

This looks at the difference between quarterly and annual compounding.

$2.19