continuously: A(t) = 1000*e^.08t
daily: A(t) = 1100(1+.08/365)^(365t)
so, when are they equal? When
1000 e^.08t = 1100(1+.08/365)^(365t)
t = 10,873 years.
continuous compounding is so close to daily compounding (1.08328% vs 1.08327%) that it takes a long time to overcome the larger starting amount.
Fiona invested $1000 at 8% compounded continuously. At the same time Maria invested $1100 at 8% compounded daily. How long will it take for their investments to be equal in value? Assume there are 365 days in every year. Please help I have tried everything and cannot solve this problem. If you can, please provide step by step explanations. Thank you!
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1 answer