# Comopund Interest Advanced Functions Question!!

• Feb 17th 2013, 03:18 PM
elisacor
Comopund Interest Advanced Functions Question!!
The experimenter claims that the equation is explained by the formula for compound interest: A = P(1 + i)n. She argues that P represents the number of coins she started with, i is 0.5 since the growth rate is about 50% (since about one-half of the coins tossed come up heads) and n is the number of tosses, which is like the compounding period.
If her hypothesis is correct, create a formula that predicts the total number of coins if an unfair (weighted) coin is used that only comes up heads one out of every four times.

Pleasehelp me out here.
My answer is a=4(1.05)^n that is what I came up with
• Feb 18th 2013, 07:58 AM
elisacor
Re: Comopund Interest Advanced Functions Question!!
can anyone help with this
• Feb 18th 2013, 07:47 PM
ibdutt
Re: Comopund Interest Advanced Functions Question!!
The question does not come under the category of compound interest. You may try it under probability section.
• Feb 18th 2013, 09:09 PM
Paze
Re: Comopund Interest Advanced Functions Question!!
Quote:

Originally Posted by elisacor
The experimenter claims that the equation is explained by the formula for compound interest: A = P(1 + i)n. She argues that P represents the number of coins she started with, i is 0.5 since the growth rate is about 50% (since about one-half of the coins tossed come up heads) and n is the number of tosses, which is like the compounding period.
If her hypothesis is correct, create a formula that predicts the total number of coins if an unfair (weighted) coin is used that only comes up heads one out of every four times.

Pleasehelp me out here.
My answer is a=4(1.05)^n that is what I came up with

As I see it the answer should read $A=P(1+0,25)^n$ but that sounds almost too simple to be true. The growth rate would decrease from 0,5 down to 0,25 if the coin was unfair like that...What is the actual answer OP?
• Feb 19th 2013, 02:45 PM
elisacor
Re: Comopund Interest Advanced Functions Question!!
this question is only worth 1 mark,crazy to think.