Example 4 Continuous Versus Annual Compounding of Interest Chapter 5.5 a.For each of 9 years, compare the future value of an investment of $1000 at 8%

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example 4 Continuous Versus Annual Compounding of Interest Chapter 5.5 a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. b.Graph the functions for annual compounding and for continuous compounding on the same axes. c.What conclusion can be made regarding compounding annually and compounding continuously?  2009 PBLPathways

a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. b.Graph the functions for annual compounding and for continuous compounding on the same axes. c.What conclusion can be made regarding compounding annually and compounding continuously?

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. Future Value of an Investment with Periodic Compounding If $P is invested for t years at the annual interest rate r, where the interest is compounded k times per year, then the interest rate per period is, the number of compounding periods is kt, and the future value that results is given by Compounded annuallyCompounded continuously

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. Future Value of an Investment with Periodic Compounding If $P is invested for t years at the annual interest rate r, where the interest is compounded k times per year, then the interest rate per period is, the number of compounding periods is kt, and the future value that results is given by Compounded annuallyCompounded continuously

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. Future Value of an Investment with Periodic Compounding If $P is invested for t years at the annual interest rate r, where the interest is compounded k times per year, then the interest rate per period is, the number of compounding periods is kt, and the future value that results is given by Compounded annuallyCompounded continuously

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. Future Value of an Investment with Periodic Compounding If $P is invested for t years at the annual interest rate r, where the interest is compounded k times per year, then the interest rate per period is, the number of compounding periods is kt, and the future value that results is given by Compounded annuallyCompounded continuously

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. Future Value of an Investment with Continuous Compounding If $P is invested for t years at the annual interest rate r compounded continuously, then the future value S is given by Compounded annuallyCompounded continuously

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. Future Value of an Investment with Continuous Compounding If $P is invested for t years at the annual interest rate r compounded continuously, then the future value S is given by Compounded annuallyCompounded continuously

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. t

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. t

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. t

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. t

 2009 PBLPathways a.For each of 9 years, compare the future value of an investment of $1000 at 8% compounded annually and of $1000 at 8% compounded continuously. t

 2009 PBLPathways b.Graph the functions for annual compounding and for continuous compounding on the same axes.

 2009 PBLPathways b.Graph the functions for annual compounding and for continuous compounding on the same axes. t S

 2009 PBLPathways c.What conclusion can be made regarding compounding annually and compounding continuously? t S