Question 548051: I am having extreme troubles solving this math problem
Part IV: Using Exponential Functions
a. Investing is an important topic for individuals in all areas. Suppose you wish to invest $10,000 in a money market account that earns 4% interest compounded annually. How much would the investment be worth after 10 years? Show all calculations.
b. Now, suppose that the above investment earns interest compounded quarterly. How much would the same investment be worth after 10 years? Why does the result differ from the previous one?
Answer by scott8148(6628)   (Show Source):
You can put this solution on YOUR website! a.) x = (10,000)(1 + .04)^10
b.) x = (10,000)(1 + .01)^40
even though the annual rate is the same, the increased number of compoundings allow the "interest on the interest" to accumulate quicker
|
|
|
