Next Mr. Cope handed back the tests and homework quizzes we took last week. Unfortunately, Teacher Logic no longer shows the class average so there will be no comparison to period 1 in this blog post. Anyway, we were able to compare our answers to Mr. Copes key and then we moved on to today's lesson.
Today we learned about continuous compounding. We began with a chart showing a bank pays 100% interest for 1 year. So we went through annually, quarterly, monthly, daily, and hourly using the equation P(1+r/n)^nt. The final value (hourly) was very close to e (2.71828) or Euters number which is used to represent exponential growth. So the formal equation for Continuously Compounded Interest is a=Pe^rt. P stands for the original number, e stands for Euters number, r stands for either the growth of decay (growth=if number is positive, decay if number is negative), and t stands for the number of years. We then did an example 1 which was "Suppose $1800 is invested at an annual interest rate of 7% compounded continuously and the money is what happens in 5 years. So the equation would be 1800e^.07(5). You then would solve it on the calculator and your answer should be 2554.32.
Moodle notes: http://gbs-moodle.glenbrook225.org/moodle/mod/resource/view.php?id=13797