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August 21, 2014

August 21, 2014

Posted by **nmh** on Friday, July 8, 2011 at 2:54pm.

- value of money -
**Henry**, Saturday, July 9, 2011 at 8:33pmPt = Po(1+r)^n.

r = 12% /12mo = 1%/mo = 0.01 = MPR = Monthly percentage rate expresed as a decimal.

n = 12comp/yr * 2yrs = 24 compounding

periods.

Pt = $6400(1.01)^24 = 8126.30 When

compounded monthly.

Pt = Po(1+r)^n.

r = 12% / 365days = 0.03288% = 0.00032877 = MPR = Daily percentage

rate expressed as a decimal.

n=365 comp/yr * 2yrs = 730 compounding

periods.

Pt = $6400(1.00032877)^730 = 8135.69

When compounded daily.

Difference=8135.69 - 8126.30 = $9.39.

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