0
Normally, you have an interest rate, r, over some specified period (typically a month, quarter or year) and an amount Y that is invested (or loaned) for n periods. Then the total value, V, of the investment is:
V = Y*(1 + r/100)^n
It is possible to chop up the total time interval into smaller intervals and adjust the interest rate correspondingly so that the total percentage change over a year remains the same. The above equation then takes the form
V = Y*e^ax
The statement in the question simply means that, instead of calculating the interest using the first formula, it is calculated using the second. The interest is then paid out every three months and so every three months the capital returns to the value Y.
Add your answer:
Earn +20 pts
Is nonstop an adverb?
Yes, it can be either an adjective or adverb. It can mean continuously, or traveled without stopping.
How do you solve compound interest formula for n?
It depends on which compound interest formula you mean. Refer to the Wikipedia Article on "Compound Interest" for the correct terminology.
What does continuous compounding mean?
Continuous compounding is the process of calculating interest and adding it to existing principal and interest at infinitely short time intervals. When interest is added to the principal, compound interest arise.
What shape has no sides?
A Circle if you mean 2d circle, 3d sphere =P Any continuously curves shape has no sides; ellipse (ellipsoid), cone, hyperbolic paraboloid...
What is root mean square or RMS?
RMS is a type of average. It is the "root of the mean of the squares". That is, the individual values are squared, the average is taken, and the square root of this is calculated. Since the "individual values" are often continuous - a typical example is a voltage, which continuously changes for example as a sine wave - integration must be used.
What mean compounded quarterly?
hello
What does quarterly mean in compounded interest?
It means that the interest is paid out every three months (quarter year). That means that the interest paid out after 3 months is earning interest for the remaining nine months. The quarterly interest rate is such that this compounding is taken into account for the "headline" annual rate. As a result, if the quarterly interest is taken out, then the total interest earned in a year will be slightly less than the quoted annual rate.
How much would 160 invested at 6 percent interest compounded continuously be worth after 12 years?
The question as stated makes no sense.Does compounded continuously mean that every tiniest moment of time the interest is 6 per cent? In that case the answer is infinite. Even if you consider the Planck time as the smallest unit of time, then far more than all the money on earth.Alternatively, the interest rate is such that at the end of one year it is equivalent to 6%. In that case, for periods of whole years, it does not matter whether the interest is compounded continuously.The 160 would be worth 321.95The question as stated makes no sense.Does compounded continuously mean that every tiniest moment of time the interest is 6 per cent? In that case the answer is infinite. Even if you consider the Planck time as the smallest unit of time, then far more than all the money on earth.Alternatively, the interest rate is such that at the end of one year it is equivalent to 6%. In that case, for periods of whole years, it does not matter whether the interest is compounded continuously.The 160 would be worth 321.95The question as stated makes no sense.Does compounded continuously mean that every tiniest moment of time the interest is 6 per cent? In that case the answer is infinite. Even if you consider the Planck time as the smallest unit of time, then far more than all the money on earth.Alternatively, the interest rate is such that at the end of one year it is equivalent to 6%. In that case, for periods of whole years, it does not matter whether the interest is compounded continuously.The 160 would be worth 321.95The question as stated makes no sense.Does compounded continuously mean that every tiniest moment of time the interest is 6 per cent? In that case the answer is infinite. Even if you consider the Planck time as the smallest unit of time, then far more than all the money on earth.Alternatively, the interest rate is such that at the end of one year it is equivalent to 6%. In that case, for periods of whole years, it does not matter whether the interest is compounded continuously.The 160 would be worth 321.95
What does compounded annually mean?
At the end of the year the interest is deposited in the account. The next year the interest is figured on the principal plus last year's interest.
What is the monthly return of 1000 invested in saving account with 5.8 monthly interest?
If you mean 5.8% annual interest rate compounded monthly, then (1000*.058)/12 = 4.83
What does effective interest rate mean?
An effective annual interest rate considers compounding. When the principle is compounded multiple times each year the interest rate increased to be more than the stated interest rate. The increased interest rate is the effective annual interest rate.
What does it mean when they say interest compounded semi annually?
It is compounded twice a year. The formula is A=P(1+rt) P is how much is put in, r is the percentage as a decimal, t is how many times it is compounded a year so in this case it would be 2. So if deposited $1000 in a bank at 8% that is compounded semi annually, the formula would look like this. A=$1000(1+.08(2))
Determine the per annum interest rate r required for an investment with continuous compound interest to yield an effective rate of 4.25 percent Express your answer as a percent?
We still need to know how often the interest is compounded ... Weekly ? Daily ? Hourly ? What does "continuous" mean ?
What does compounded mean in a simple way?
Compounded means when something, like interest or growth, is added to the principal amount and then calculated on the new total. This results in exponential growth over time.
What does '10 percent Annual Equivalent Rate' mean?
Annual Equivalent Rate - AERInterest that is calculated under the assumption that any interest paid is combined with the original balance and the next interest payment will be based on the slightly higher account balance. Overall, this means that interest can be compounded several times in a year depending on the number of times that interest payments are made.In the United Kingdom, the amount of interest received from savings accounts is listed in AER form.Calculated as:Where:n = number of times a year that interest is paidr = gross interest rateInvestopedia Says:For example, a savings account with a quoted interest rate of 10% that pays interest quarterly would have an annual equivalent rate of 10.38%. Investors should be aware that the annual equivalent rate will typically be higher than the actual annual rate calculated without compounding.Above retrieved from Answers.comViper1
What does quarterly mean in accounting?
every 3 months
What does 'GCA exports' mean in regards to a 'Quarterly Performance Report'?
GCA Exports
