Task: Suppose the deposit $20,000 for 5 yrs @ 8% rate what is the return annually (n = 1) and quarterly (n = 4).
Round both to the hundredth place.
1) Does compounding annually or quarterly yield more interest and explain
2) If a bank compounds continuously the the formula used is A=Pe^rt where e is a constant and equals approx. 2.7183. Calculate A with continuous compounding. Please show how
3) How long will it take to double the money @ a 8% interest rate and continuous compounding.. Please show how.