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Question
You are investing P dollars at an annual interest rate of r, compounded continuously, for t years. Which of the following would result in the highest value of the investment? Explain your reasoning. Double your interest rate.
Solution
VerifiedAnswered 1 year ago
Answered 1 year ago
Step 1
1 of 3For continuous compounding, the balance in the account has the formula:
where is the account balance, is the deposited/invested amount, is the rate of interest, and is the time in years.
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