Question

MEDAL - Deposits x, at 3% compounded daily.
How much interest after two years?

Pe^rt ?
xe^(.03[365]2) ?

Is the two years computed correctly?

Answer 1

@wahahaha

Answer 2

hmmm I was thinking of doing it like this
The EAR of computing it daily is either \[EAR=\left (1+\frac{.03}{365} \right )^{365}-1\]
Or \(e^{.03}=3.045\)
and then we square it for the 2 year period
So it would be \[(e^{.03})^2\]
or
\[ \left(\left (1+\frac{.03}{365} \right )^{365}-1\right) ^2\]

Answer 3

We are only interested in finding out the amount of overall interest
Not what the amount deposited will equal in 2 years time

Answer 4

It's with e for cont compounding. And, thanks, only interest...

Answer 5

Ya so in this case you can use either cuz in reality the EAR for 365 pretty much equals e^r

Answer 6

e^0.03 = 1.03

your EAR equared = 0.0009274

Answer 7

hmmm u r wrong btw

Answer 8

\[EAR=\left (1+\frac{.03}{365} \right )^{365}-1=.03045\]
\[e^{r}-1=e^{.03}-1=.03045\]

Answer 9

Oooooooo
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