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There's no such thing as "compounded continously", even if the spelling were corrected.
The compounding interval must be specified, no matter how short it may be.
Popular compounding intervals include: Annually, semi-annually, quarterly,
monthly, weekly, or daily. Technically, it could even be hourly, or minutely, but
it has to be specified. Compounding is a discrete process, and can never
proceed "continuously".
Simple interest (compounded once) Initial amount(1+interest rate) Compound Interest Initial amount(1+interest rate/number of times compounding)^number of times compounding per yr
It depends how the interest is calculated. If it's compounded, your initial 500 investment would be worth 638.15 after 5 years.
(1 + .07/4)4x = 3 4x log(1+.07/4) = log(3) x = 0.25 log(3)/log(1.0175) = 15.83 The amount of the original investment doesn't matter. At 7% compounded quarterly, the value passes triple the original amount with the interest payment at the end of the 16th year.
Continuous interest formula, A = Pe^(rt)....where A is the accumulated amount, P is the initial investment, r is the interest rate expressed as a decimal, and t is the time - usually in years. Then, A = 6000e^(0.085 x 6) = 6000e^0.51 = 9991.75 So the growth amount is, 9991.75 - 6000.00 = 3991.75
Use the equation $=$0*(1 + r)xn where $ is the amount of money, $0 is the initial amount of money, r is the rate, x is the number of times per year the interest is compounded, and n is the number of years the interest is compounded. We are solving for n. To do this we need to use logs. log(1 + r)($/$0)/x = n log1.08(5006/1000)/12 = n = 1.744 years.
If the interest is simple interest, then the value at the end of 5 years is 1.3 times the initial investment. If the interest is compounded annually, then the value at the end of 5 years is 1.3382 times the initial investment. If the interest is compounded monthly, then the value at the end of 5 years is 1.3489 times the initial investment.
Simple interest (compounded once) Initial amount(1+interest rate) Compound Interest Initial amount(1+interest rate/number of times compounding)^number of times compounding per yr
It depends how the interest is calculated. If it's compounded, your initial 500 investment would be worth 638.15 after 5 years.
We can think of two ways that could happen: 1). The initial investment amounts (the principles) may be different. 2). Interest on the two investments may be compounded at different intervals.
(1 + .07/4)4x = 3 4x log(1+.07/4) = log(3) x = 0.25 log(3)/log(1.0175) = 15.83 The amount of the original investment doesn't matter. At 7% compounded quarterly, the value passes triple the original amount with the interest payment at the end of the 16th year.
The at 8.5%, the investment increases, every year, by a factor of 1 + 8.5/100, that is, by a factor of 1.085. The total amount of money you get at the end of five years, then, is 6400 x 1.085^5 (the "^" means "power"). If you subtract the initial capital from that, what remains is the interest earned.
r=ln((A/P)^1/t) Where: A is the Final amount P is the Initial amount t is the time passed r is the interest rate
Interest earned is computed by taking the principal amount and multiplying it by the rate and time and divided by the time taken. The interest in this case is 30.
fv = pv(1+r/12)^t Where: fv = future value pv = present (initial) value r = interest rate t = time period
A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending is called crowding out effect
No. If the account is earning interest the current amount should be greater than the initial deposit.
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