Exponential and logarithmic function
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Just on my way to the bank to check out some interest rates!
Get a loan today!
Hello there, I wanted to talk interest rates.
Right this way good sir.
So you would like to invest 6000 dollars? Here at our bank it will be compounded annually at 8% interest.
So how much money would I have at the end of 10 years?
First you must plug the money invested, interest rate, and period of time into the equation A=P(1+r)^t
A= The amount at the end of compounding P= Starting amount R= Interest rate in a decimal T= Amount of years
So, you plug all the numbers in accordingly and you get A=6000(1+.08)^10. First you add 1 and .08 which you then raise to the 10 to get 2.1589. You then multiply that by 6000 which brings you to a grand total of 12,953.55 which is your amount at the end of compounding.
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