Question

# a. If an account has an APR of 100 r % compounded continuously, its annual growth...

a. If an account has an APR of 100 r % compounded continuously, its annual growth factor is

b. Based on your answer to part (a), the accounts t -year growth factor must then be

c.Based on your answers to parts (a) and (b), what is the account value after t years if P dollars is initially invested in the account?

d.Therefore, the function A that models the account's value after t years if interest is compounded continuously is (use the same parameter letters defined above):

 Ans a. If APR =r=100% with continuous compounding, Annual Growth factor =e^100 Where e=2.7183 approx. Ans b. The Accounts t year growth factor will be =e^(rt) Where e=2.7183 approx. Ans c. if P dollars initially invested, maturity amount after t-years will be =P*e^(rt) Where e=2.7183 approx. Ans d. the function A that models the account's value after t years if interest is compounded continuously is A=P*e^(rt) Where e=2.7183 approx. P=Initial \$ investment

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