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bank compounds

Depostiting 3,000 for 6 years and 7 percent interest, what would be the return to the nearest cent?
What would be the return if the bank compounds monthly?
If compounds are continuous then formul used is A=pe(small n) where e is a constant and equals approximately 2.7183. Calculate A with continuious compounding. Round numbers to the nearest cent.

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Ryan S. | Mathematics and StatisticsMathematics and Statistics
4.8 4.8 (10 lesson ratings) (10)
Your question is using the term "return" in an unusual way. Usually return refers to rate of return which in this case is the interest rate. For this problem, I will interpret return as the dollars earned as interest.
Also the formula you have for continuous compounding is not correct. A=P*e^(i*t) where A = Account value, P = initial balance, i = interest per year, and t = time in years. The symbol ^ means raised to the power of.
Let A(t) be the account value at time t in years.
Let r(t) = A(t)-3000
Annual compounding
A(6) = $3000*1.07^6=$4502.19
r(t) = $1502.19
Monthly compounding
A(6) = $3000*(1+.07/12)^(6*12) = $4560.32
r(t) = $1560.32
Continuous compounding
A(6) = $3000*e^(.07*6) =$4565.88
r(t) = $1565.88