Question

We consider compound interest with a nominal annual rate r compounded n times per year. The value v(t) of an initial investment v0 after t years is given by?

Answer 1

The value v(t) of an initial investment v0 after t years for compound interest is given by the formula: v(t) = v0 * (1 + r/n)^(n*t).

Step-by-step explanation:

The value v(t) of an initial investment v0 after t years, for compound interest with a nominal annual rate r compounded n times per year, is given by the formula:

v(t) = v0 * (1 + r/n)(n*t)

Where:

• v(t) is the value after t years
• v0 is the initial investment
• r is the nominal annual interest rate
• n is the number of times the interest is compounded per year