If an initial amount A 0 of money is invested at aninterest rate r compounded...

amacorrit80

amacorrit80

Answered

2022-07-24

If an initial amount A 0 of money is invested at aninterest rate r compounded n times a year, the value of the investment after t years is:
A = A 0 ( 1 + r n ) n t
If we let n we refer to the continuous compounding of interest. Use L'Hospital's Rule to show that if interest is compounded continuously, then the amount aftert years is
A 0 e r t

Answer & Explanation

Bianca Chung

Bianca Chung

Expert

2022-07-25Added 16 answers

Given that If an initial amount A 0 of money isinvested at an interest rate r compounded n times a year, the value of the investment after t years is
we know that as n ( 1 + r n ) n = e r
Therefore A = A 0 e r t

Do you have a similar question?

Recalculate according to your conditions!

Ask your question.
Get your answer.

Let our experts help you. Answer in as fast as 15 minutes.

Didn't find what you were looking for?