Results 1 to 4 of 4

Math Help - maths in economics

  1. #1
    Newbie
    Joined
    May 2008
    Posts
    2

    maths in economics

    • Calculate the value of 1,200 invested for 5 years at 4% interest rate compounded:
      • annually
      • semi-annually
      • quarterly
      • continuously
      • How many years would it take for an amount of money invested at 4% interest rate compounded continuously to triple in value?
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Senior Member
    Joined
    Feb 2008
    From
    Berkeley, Illinois
    Posts
    364
    Quote Originally Posted by daisy View Post
    • Calculate the value of 1,200 invested for 5 years at 4% interest rate compounded:
      • annually
      • semi-annually
      • quarterly
      • continuously
      • How many years would it take for an amount of money invested at 4% interest rate compounded continuously to triple in value?
    For the annual and quarterly compounding, go here:

    Balance Roll with Interest

    For start date and end date, just enter 2 dates with a 5 year difference, like 1/1/2008 and 1/1/2013.

    You should be able to figure out the semi-annually from here.
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Super Member Aryth's Avatar
    Joined
    Feb 2007
    From
    USA
    Posts
    652
    Thanks
    2
    Awards
    1
    The compound Interest Equation is as follows:

    P = C(1 + \frac{r}{n})^{nt}

    where:

    P = \text{Future Value}

    C = \text{Initial Deposit}

    r = \text{Interest Rate}

    n = \text{Number of times invested per year}

    t = \text{Number of years invested}

    Let's go ahead and put what we know:

    P = ?

    C = 1200

    r = .04

    n = \text{Varies}

    t = 5

    1) Annually (n=1):

    P = 1200(1 + .04)^{5}

    P = 1459.98

    2) Semi-annually (n=2):

    P = 1200(1 + \frac{.04}{2})^{10}

    P = 1462.79

    3) Quarterly (n=4):

    P = 1200(1 + \frac{.04}{4})^{20}

    P = 1464.23

    4) Continuously ( n\to \infty):

    This has a special equation:

    P = Ce^{rt}

    All the variables remain the same.

    P = 1200e^{5(.04)}

    P = 1465.68

    And there you go.
    Follow Math Help Forum on Facebook and Google+

  4. #4
    Member
    Joined
    Apr 2008
    Posts
    111
    Thanks
    2
    How many years would it take for an amount of money invested at 4% interest rate compounded continuously to triple in value?
    <br />
\begin{gathered}<br />
  P = Ce^{rt}  \hfill \\<br />
   \Leftrightarrow  \hfill \\<br />
  t = \tfrac{1}<br />
{r} \cdot \ln \tfrac{P}<br />
{C} = \tfrac{1}<br />
{{.04}} \cdot \ln \tfrac{3}<br />
{1} \approx 27.46530721 \hfill \\ <br />
\end{gathered} <br /> <br />

    or 27 years and 169.84 days
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Help me with my grade 11 maths [easy maths]
    Posted in the Pre-Calculus Forum
    Replies: 11
    Last Post: December 27th 2009, 03:09 PM
  2. maths economics
    Posted in the Calculus Forum
    Replies: 1
    Last Post: May 22nd 2009, 10:07 AM
  3. Maths Based Economics
    Posted in the Math Topics Forum
    Replies: 0
    Last Post: March 31st 2009, 03:08 AM
  4. Replies: 0
    Last Post: September 5th 2007, 02:50 AM
  5. Replies: 1
    Last Post: October 3rd 2006, 08:59 AM

Search Tags


/mathhelpforum @mathhelpforum