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Sagot :
Compounded continuously the balance grows at a continuous rate of 1.7%.
What is compound interest ?
- Compound interest is when you earn interest on both the money you've saved and the interest you earn.
- So let's say you invest $1,000 (your principal) and it earns 5 percent (interest rate or earnings) once a year (the compounding frequency).
The model used for continuous compounding is
f(t) = Pe^(rt)
where P is the principal amount, and r is the interest rate being compounded. Assuming a typo in your given equation, you have
f(t) = 1000·e^(0.017t)
Matching the various parts of the equation, we see that P = 1000 and r = 0.017 = 1.7%.
Therefore, the balance grows at a continuous rate of 1.7%.
Learn more about compound interest
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