Compound Interest Formula:
Compound Interest Formula: [pic]
Continuous Compounding: [pic]
Present Value Formulas: [pic]
If the interest is compounded continuously, then [pic]
1. Find the amount that results from each investment:
a) $100 invested at 4% compounded quarterly after a period of 2 years.
b) $50 invested at 6% compounded monthly after a period of 3 years.
2. Find the principal needed now to get each amount, that is, find the present value.
a) To get $100 after 2 years at 6% compounded monthly.
b) To get $75 after 3 years at 8% compounded quarterly.
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