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Mathematics & Economics

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Math Problem

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# Math Problem Paper (Math Problem Sample)

Instructions:

An investor receives $1084.0 in 2 weeks for an initial investment of $1035.0. What is annual percentage return with continuous compounding? Show work a. 232.90 b. 120.27 c. 123.09

source..Content:

An investor receives $1084.0 in 2 weeks for an initial investment of $1035.0. What is annual percentage return with continuous compounding? Show work a. 232.90 b. 120.27 c. 123.09 Continuous Compound interest is given by

A= P ert

Where r is the rate of interest rate

P = is the Principal

R is the rate of interest

E is the constant e

1 year has 52 weeks

Thus 2 weeks is equivalent to 2/52 years = 0.03846

A= P ert

1084 = 1035 e ^ 0.03846 r

1084 = e ^ 0.03846r

1035

Thus 0.03846r = ln (1084 / 1035)

Ln (1084 / 1035) = 0.046256

Th...

A= P ert

Where r is the rate of interest rate

P = is the Principal

R is the rate of interest

E is the constant e

1 year has 52 weeks

Thus 2 weeks is equivalent to 2/52 years = 0.03846

A= P ert

1084 = 1035 e ^ 0.03846 r

1084 = e ^ 0.03846r

1035

Thus 0.03846r = ln (1084 / 1035)

Ln (1084 / 1035) = 0.046256

Th...

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