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August 31, 2014

August 31, 2014

Posted by **Scott** on Wednesday, December 19, 2012 at 3:46pm.

- Math -
**Damon**, Wednesday, December 19, 2012 at 3:49pmScott, you are not giving us anything like the information required for this problem or the other one.

Compound interest?

How often? (monthly, continuous, quarterly)

How long?

In your earlier problem you gave us no idea what the interest rate was or how often it was compounded. Are you making these problems up yourself?

- Math -
**Scott**, Wednesday, December 19, 2012 at 4:10pmIt is not a school question. It is a real life question.

So let's assume the interest averaged 4 % compounded daily over the 27 years.

- Math -
**Damon**, Wednesday, December 19, 2012 at 10:23pmfuture value = present value e^yr

where y = 27 years

r = .04 yearly interest rate

e^1.08 = 2.945

so

2700 * 2.945 = 7950.63

- Math -
**Damon**, Wednesday, December 19, 2012 at 10:25pmcalculator here:

http://www.moneychimp.com/articles/finworks/continuous_compounding.htm

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