# questions about interest rates

• May 6th 2009, 04:40 PM
jhonwashington
questions about interest rates
Hello, could you please help me to solve the following problems?

How much more interest will be earned if $2,000 is invested for 4 years at 8% compounded continuously, instead? How much more interest will be earned if$2,000 is invested for 4 years at 8% compounded continuously, instead of at 8% compounded quarterly?

A parent wants to have $400,000 available for her child's education. Find the amount that would have to? a parent wants to have$400,000 available for her child's education. Find the amount that would have to

Suppose an individual wants to have $200,000 available for her child's education. Find the amount that would have to be invested at 12%, compounded continuously, if the number of years until college is: 1 ) 6 years 2 ) 15 years 3) Does leaving the money invested twice as long mean that only half as much is needed initially? Explain why or why not. please help me, I'm trying to study for the final exam which will take place tomorrow. thank you. • May 10th 2009, 10:37 AM TKHunny The first is an excellent exploration. Try this:$\displaystyle 2000*\left(1\;+\;\frac{0.08}{m}\right)^{4*m}\$

What is it for m = 1? Annually?
What is it for m = 2? Semi-Annually?
What is it for m = 4? Quarterly?
What is it for m = 12? Monthly?
What is it for m = 52? Weekly?
What is it for m = 365? Daily?
What is it for m = 365*24? Hourly?

Is there a limit to the values you are getting? Let's remember a little calculus and track it down.