Financial math 5 stars
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Financial math 5 stars

[From: ] [author: ] [Date: 12-07-09] [Hit: ]
n = 1: A(0) = $6209.Semiannual compounding, n = 2: A(0) = $6139.Quarterly compounding, n = 4: A(0) = $6102.Monthly compounding,......
which amount should i deposit today if the savings pay 10% to accumulate after 5 years , 10,000 bucks

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Assuming a single deposit at the beginning of the compounding period, but what compounding period?

A(t) = A(0)(1+r/n)^(t/n)
t = years
n = number of compounding periods per year
r = annual interest rate
A(t) = amount after t years
A(0) = initial deposit

A(0) = 10000/(1+0.10/n)^(5n)
Annual compounding, n = 1: A(0) = $6209.21
Semiannual compounding, n = 2: A(0) = $6139.13
Quarterly compounding, n = 4: A(0) = $6102.71
Monthly compounding, n = 12: A(0) = $6077.89
Daily compounding, n = 365: A(0) = $6065.72
Continuous compounding: A(0) = 10000e^(-.5) = $6065.31

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good i should deposit today if the saving pay 15% to accumulate after 5 years, 10000
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