document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1121519>Question 1121519</A>: <I><SPAN STYLE=\"word-break: break-all;\"> How much more will an investment of &#8203;$15 comma 000 earning 5.5 % compounded continuously for 7 years&#8203; earn, compared to the same investment at 5.5 % compounded monthly for 7 &#8203;years? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #737436 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=737436\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> an investment of 15,000 compounded continuously for 7 years uses the formula:\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "f = p * e^(rn)\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "p = principal or present value<BR>\n" );
document.write( "f = future value<BR>\n" );
document.write( "r = interest rate per time period<BR>\n" );
document.write( "n = number of time periods.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "in your problem, this equation becomes f = 15,000 * e^(.055*7)\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "solve for f to get:\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "f = 22,044.21482\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "an investment of 15,000 compounded monthly for 7 years uses the formula:\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "f = p * (1+r)^n\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "f = future value<BR>\n" );
document.write( "p = principal or present value<BR>\n" );
document.write( "r = interest rate per time period<BR>\n" );
document.write( "n = number of time periods.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "time period is in months.<BR>\n" );
document.write( "take annual interest rate and divide it by 12 to get .055/12 per month.<BR>\n" );
document.write( "take number of years and multiply them by 12 to get 7*12 = 84 months.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "in your problem, this equation becomes f = 15,000 * (1 + .055/12) ^ (7*12)\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "solve for f to get:\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "f = 22,024.83315\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "compare that to continuous compounding which gets you f = 22,044.21482.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "continuous compounding gives you 22,044.21482 minus 22,024.83315 equals 19.38167648 more dollars in interest than monthly compounding.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );