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The Number

This document discusses the mathematical constant e, graphing exponential functions with base e, and comparing compound interest rates when interest is compounded quarterly versus continuously. It provides the formulas for calculating compound interest at discrete intervals and continuously, and asks the reader to calculate the difference in account balances after 6 years when one account compounds interest quarterly and the other continuously, both earning 3% interest.

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frankdan
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1K views2 pages

The Number

This document discusses the mathematical constant e, graphing exponential functions with base e, and comparing compound interest rates when interest is compounded quarterly versus continuously. It provides the formulas for calculating compound interest at discrete intervals and continuously, and asks the reader to calculate the difference in account balances after 6 years when one account compounds interest quarterly and the other continuously, both earning 3% interest.

Uploaded by

frankdan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name

Date

Pd

The Number e
n 1 10 100 1,000 10,000 100,000 As n goes to infinity (1+1/n)n

Name Graphing exponential base e functions 1. Graph f ( x) e x and f ( x) e x

Date

Pd

2. Graph f ( x) e x 2

Domain:

Domain:

Range:

Range:

Compounding Interest Continuously: When interest is compounded at discrete intervals (i.e. monthly, daily, annually, etc..) we use the formula:

When interest is compounded continuously (meaning infinitely often), then we use the formula:

1. Compare the account balances of two saving accounts after 6 years. Both accounts bear 3% interest. The first account compounds quarterly, the second account compounds continuously. How much more money do you make in the 2nd account?

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