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Chiefanov · Answer 1 · 2023-07-19T17:24:01+0000

To determine the value of a continous compound investment:

(b) Write a function that determine the value of the investment:

$\begin{gathered} f(t)=f_oe^(rt) \\ P\mleft(t\mright)=valueattimetP_0=originalprincipalsumr=nominalannualinterestratet=lengthoftimetheinterestisapplied \end{gathered}$
$\begin{gathered} F(t)=f_0e^(rt) \\ f_0=2100 \\ r=3.4\text{ \%=0.034} \\ F(t)=2100e^(0.034t) \\ wheret=\text{ number of years } \end{gathered}$

(c) Annual Percentage Yield APY for continous compounding

$\begin{gathered} APY=e^r-1 \\ APY=e^(0.034)-1 \\ \text{APY}=1.03458-1 \\ \text{APY}=0.03458 \\ \text{APY}=3.458\text{ \%} \end{gathered}$

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