Question 491898: Here I have a three part question I need help with:
A. If an investment of $100 were made in the year the Declaration of Independence was signed(1776), and if it earned 3% compounded quarterly, how much would it be worth in 2016?
B. Discuss the effect of compounding interest monthly, daily, and continuously, on the $100 investment.
C. How do I graph the growth of the investment on a Ti-83.
Any help would be appreciated. I am mainly concerned with finding the answer to A. I got an answer, but it doesn't seem anywhere near right.
For the first part, I got FV=100(1+0.075)^960=1.4194?
Answer by ccs2011(207)   (Show Source):
You can put this solution on YOUR website! You are very close, you set up the formula correctly, however, i think you just forgot a zero in the (.075) part.
--> 0.03/4 = 0.0075
--> FV = 100(1+.0075)^960 = 130,392.50
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For part B) mainly the idea is the more you compound it, the more you will earn within the same time period. If you earn interest every month, then you are able to reinvest that interest monthly. If you earn daily, then you reinvest daily and over say a year you would have earned more total interest than had you earned monthly interest.
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For part C), go to the "Y =" button and enter the above function for FV from part A) but instead of putting 960, put 4x, then you can see the yearly progress. Then push the "Graph" button...if you look where x=240, y should be about 130,000.
You may need to adjust window size
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