# Interest and Limits

Not what you're looking for? Search our solutions OR ask your own Custom question.

Please see attachment for question.

If the annual interest rate is r, then the effective interest for a time period of length T with compounding frequency N is given by the following equation (see that attached file for the equation).

(1) Show by algebra that r(T,N) = (1 + rT/N)^N - 1.

(2) What is the limit r(T) = lim(N --> infinity(r(T,N))? You do not need to justify your answer in this part.

https://brainmass.com/economics/principles-of-mathematical-economics/interest-limits-465722

#### Solution Summary

This solution answers questions regarding interest and limits.

$2.49