Saturday, July 23, 2022

"Pert"-formula for compounding continuously

The first bonus question of the pop quiz becomes easy once you know the formula: "Pert


P = $21,817.10
e = 2.7...
r = 0.1673
t = 1

1. (21817.10) * exp (0.1673) = $25,790.19

The other bonus questions in this set I solve with ... [wait for it] ... SPREADSHEETS!

Of course, $25k is what you HAVE after 1 year, not what you MAKE. So, to answer the question, what you MAKE is:

$25,790.19 - $21,817.10 = $3,973.09



No comments:

Post a Comment