The formula for the amount in a savings account compounded times per year for years at

Chapter 8, Problem 94

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Compound Interest The formula for the amount A in a savings account compounded n times per year for t years at an interest rate r and an initial deposit of  P is given by

\(A=P\left(1+\frac{r}{n}\right)^{n t}\)

Use L’Hôpital’s Rule to show that the limiting formula as the number of compoundings per year approaches infinity is given by \(A=P e^{r t}\).

Text Transcription:

A=P left(1+r / n right^n t

A=P e^r t

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