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October 20, 2014

October 20, 2014

Posted by **Anonymous** on Monday, April 11, 2011 at 10:39am.

- compounded continously -
**Henry**, Tuesday, April 12, 2011 at 8:51pmCompounded Continuously

Pt = Po*e^rt = $60000,

r = (16.3%/365) / 100% = 0.0004466 = Daily % rate expressed as a decimal.

t = 40yrs * 365days/yr = 14600 days.

rt = 0.0004466 * 14600 = 6.52.

Po * e^6.52 = 60000,

Po = 60000 / e^6.52 = $88.42 = initial deposit.

ComPounded Daily

Pt = Po*(1+r)^n = $60000,

r = (16.3%/365) / 100% = 0.0004466 =

daily % rate express as a decimal.

n = 365comp./yr * 40yrs = 14600 comp.

periods.

Po*(1.0004466)^14600 = 60000,

Po = 60000 / (1.0004466)^14600 = $88.52 = initial deposit.

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