need help

At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.

Get our expert's

answer on brainly

SEE EXPERT ANSWER

Get your free account and access expert answers to this and thousands of other questions.

A community for students.

See more answers at brainly.com
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.

Get this expert

answer on brainly

SEE EXPERT ANSWER

Get your free account and access expert answers to this and thousands of other questions

question is about compound interest. \[a=p(1+r/m)mt and a=p(1+r)t\]
symbols are ordinary, why this two result arn't the same?
a=p(1+r/m)^mt a=p(1+r)^t

Not the answer you are looking for?

Search for more explanations.

Ask your own question

Other answers:

@.Gjallarhorn.
I'm sorry, I don't know your answer since I'm not good with financial mathematics
\[a=p \left( 1+r \right)^t\] here interest is compounded annually \[a=p \left( 1+\frac{ r }{ m } \right)^{mt}\] here interest is compounded monthly. or we can say interest of first month is also principal for next month and so on.
i know that ,but they must be equal, i think so
no, for first year principal is same during whole year. but in second case principal is different for every month.
so if i have r as anual rate, and they tell me to fing future value of smt,but intereset must be monthly ,what i will do?
@Palmo4ka esli mojesh pomogi :)
let us take the case principal=100 rate=12% annually then amount after first month \[a=100\left( 1+\frac{ .12 }{ 12 } \right)^1=101\] amount after second month \[a=101\left( 1+\frac{ .12 }{ 12 } \right)^1=101*1.01=102.01\] .......... this becomes principal for third month and so on. we see principal increases every month. but in the first case principal is same whole year.
i understand that man, but why did you diveded anual rate by 12,is it ok?
@sparrow2 Do you speak Russian?
no
kaneshna gavariu, no po angliski luchshe :)
а я, наоборот, говорю лучше по-русски:) @sparrow2
rate is annual ,but we are calculating every month so we divide by 12 if we have to calculate after every 6 months,we divide by 2 if we have to calculate every 3 months ,we divide by 4
so the answers will be different when calculating anualy and monthly?
yes
and dividing by periods is ok? so do they mean so when asking for periods(we know only annualy)
@Palmo4ka potomushto ti iz rossi( no ia net)
i am sorry i don't understand your language fully,i am an indian.
i'm also not native speaker :D
so you divided it by 12 or by 6 and so on(anual rate) is it ok?
so if i have anual rate like 12%, if they askme me to calcualte anualy i use 12%,but by monthly i will use 1% and the answers will be different
correct
but at the sametime multiply t by 12
i thought that this was just 2 different ways,but the answers must be the same, i thougt so
no ,as you see principal goes on changing for compound interest.
on earth :)
okay thanks man :)
yw
It might be enlightening to see what happens if you calculate the interest every day, every hour, every second..
@ganeshie it's true. you see, if you increase periods the amount is increasing too(it's more beneficila for banks to use more periods :D )
pe^rt will be if its continous
Haha these days most banks calculate interest continuously(every nano second or so) The interest wont increase much by increasing the periods, it saturates after 12 periods or so
Notice that we get that continuous formula by letting \(m\to \infty\) in the discrete version : \[\large \lim\limits_{m\to\infty}~p\left(1+\frac{r}{m}\right)^{mt} = pe^{rt} \]
yeah i see, it easy to prove :)
Letting \(p=r=t=1\), we get the definition of euler constant \(e\) : \[\large \lim\limits_{m\to\infty}~\left(1+\frac{1}{m}\right)^{m} = e\]
yeah that is cool way to define e :) creative
okay thanks @ganeshie8
that is indeed one of the most useful definitions of \(e\) https://en.wikipedia.org/wiki/E_(mathematical_constant)#History
so when you have like 12% anualy can you always say that monthly will be like 1 % @ganeshie8
oh i closed the question

Not the answer you are looking for?

Search for more explanations.

Ask your own question