Concept explainers
Present Value: The present value P is the investment that is required today to yield a future value of B. if interest is compounded continuously at an APR of r, as a decimal, then the present value for an investment that will yield B future dollars after t years is given by
a. Write a formula for the present value as a function of time if the APR is 6% and the future value is
b. Make a graph of the function you found in part a. use a horizontal span of 0 to 25 years.
c. Does a small change in time have a greater effect on the present value at 1 year in the future or at 10 years in the future?
Want to see the full answer?
Check out a sample textbook solutionChapter 2 Solutions
Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
- An investment account with an annual interest rateof 7 was opened with an initial deposit of 4,000 Compare the values of the account after 9 yearswhen the interest is compounded annually, quarterly,monthly, and continuously.arrow_forwardYou invest $6000 at an annual rate of 4. Find the balance after 7 years for each type of compounding. a.Quarterlyb.Monthlyc.Continuousarrow_forward
- Algebra & Trigonometry with Analytic GeometryAlgebraISBN:9781133382119Author:SwokowskiPublisher:CengageGlencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw HillAlgebra and Trigonometry (MindTap Course List)AlgebraISBN:9781305071742Author:James Stewart, Lothar Redlin, Saleem WatsonPublisher:Cengage Learning
- Calculus For The Life SciencesCalculusISBN:9780321964038Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.Publisher:Pearson Addison Wesley,College AlgebraAlgebraISBN:9781305115545Author:James Stewart, Lothar Redlin, Saleem WatsonPublisher:Cengage Learning